A term insurance plan is a form of life insurance cover where the insurer guarantees financial protection to the policyholder’s nominees or family upon his/her untimely death. The term insurance plan offers financial security; therefore, it becomes important to opt for the best term plan in order to get the maximum benefit out of it.
Once you know what is term plan, you must know about the benefits of investing in a term insurance plan. Listed down are the benefits that you can enjoy after investing in a comprehensive term insurance plan:
- Income Tax Benefits
As per Section 80 of the Income Tax Act 1961, you can get maximum term insurance tax benefits by purchasing the maximum coverage plan.
- Additional Riders
The best term plan comes with riders that you can choose to enhance the basic term insurance benefits. You can add extra riders by paying an additional premium. Some of the most common riders include – critical illness cover, waiver of premium, accidental death benefit and many more.
- High Sum Assured
Term insurance is a simple insurance plan that is available at a premium that you can easily afford. The early you buy term insurance, the lower will be the premium.
- Critical Illness Cover
You can suffer from critical illnesses during any phase of your life. You can choose to get critical illnesses coverage by opting for an add on/rider.
People tend to make many mistakes while purchasing a term insurance plan. Getting wrong or inaccurate information, opting for the cheapest cover, and not properly comparing the benefits make for some of the most common mistakes individuals commit while buying the best term plan.
Here is the detailed list of some of the mistakes you must avoid:
- Inadequate Sum Insured
The term insurance plan you purchase provides financial coverage and security to your family after being gone. It is based on your current financial situation, including the lifestyle and educational needs of your children. In case you are your family’s only source of income and don’t select the right policy amount, your family will still face financial issues while maintaining their lifestyle.
The lower amount of sum may not last for a long time unless your family finds a regular income to support your children’s education.
- Delaying the Purchase of Term Insurance
The early you purchase your term insurance plan, the more cover you can get with less premium value. The best time to purchase a term insurance plan is when you have a stable and regular flow of income, especially in your younger years. The term insurance policy will protect you against unforeseen incidents of life.
- Opting for Excessive Riders
Add-ons are always useful for getting the maximum benefit out of your term insurance policy. A disproportionate number of it can result in higher premiums which can become unreasonable in the future. You can purchase the add-ons you may need, or simply wave them off from your term insurance policy to make it affordable.
- Buying a Term Plan for Shorter Duration
Buying a term insurance plan is a vital decision. Your term plan must cover your maximum age so that you can get the most out of it. Short duration term insurance plans may have smaller premiums, but the amount of the premium will increase significantly if you renew it down the line. A short-term plan may turn out to be useless in a time of need.
- Choosing Price Over Features
The primary responsibility of a term insurance plan is to provide coverage for critical illnesses. Choosing the right and the best term plan may provide you with the correct and assured sum along with affordable premiums. The low-priced plan may or may not give you all the benefits of a term insurance plan.
Therefore, an affordable plan with a few add-ons will provide you with the right coverage.
Research Well Before Investing in a Term Insurance Plan
The term insurance policy offers a great financial cushion to your family in what could be the most unfortunate time in their lives. It is your responsibility to thoroughly examine the coverage, terms and conditions and every other detail to have a fair idea about what you are purchasing and how a policy process works. It is a wise decision to do a little research on your own before buying the best term plan. Study the plan properly to get the maximum out of it.
Therefore, you should seek help from trusted and reputable insurers like Max Life Insurance. The team of dedicated professionals will help you choose the best and the most suitable term insurance plan for your family. Make a smart choice by investing in the best term insurance plan, which can prove to be a valuable asset for your family.
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