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Between 2021 and 2022, Indian ownership of term insurance plans increased from 39% to 43% 1.

Wondering, “what is a term insurance plan?” –

Term insurance is a simple and affordable type of life insurance. By paying a small premium, it provides financial security to the nominee(s) in the case of the unfortunate demise of the life insured. The nominee(s) will receive the promised death benefit pay-out from the life insurance company.

This pay-out will help the dependents have a stable life when the life insured is not around. Since, term plan is a “pure-risk” cover, if you survive throughout the policy term, no benefit will be paid. However, these days you can opt for term insurance with return of premium that allows you to get back your premiums on maturity.

It’s always a good idea to be an early bird when buying term insurance. Nevertheless, it’s still not too late to get one even if you’re in your 50s now. Here’s why:

Replace Lost Income and Pay Living Expenses

Irrespective of your age when you die, a term plan can help your dependents make up for the lost source of income, especially if you were the sole breadwinner. The pay-out received can help them pay their living expenses.

Meet Your Family’s Lifestyle Needs

Over time, our lifestyle requirements change. Alongside, inflation keeps rising and that brings down our purchasing power. The pay-out that your nominees get from term insurance can financially aid them to maintain their lifestyle.

Protection against Liabilities

You may have taken out loans to buy a house, a car, and other assets. You can rest assured that even if you pass away, the burden from these loans won’t put your family in financial danger. If something tragic happens, the payment from the term plan might be able to pay off the loan(s). Moreover, his gives them peace of mind to focus on their own needs.

Financial Security for Children

Your kids are growing and so are their costs to have a stable livelihood. The maturity benefit of term insurance can also help financially secure the future of your children, at least until they start earning themselves.

Tax Benefits

Taxpayers may claim specific tax benefits in accordance with the guidelines set in the Income Tax Act. The most often claimed tax benefits fall under Section 80C and Section 10(10D). Please note that the tax norms are subject to change.

To conclude, you can enjoy the above benefits irrespective of the age at which you opt for term insurance. So, compare and buy the best term life insurance plan most suited for your and your family’s future financial security.

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Tax Disclaimer: Tax benefits are defined by the Income Tax Act of 1961 and are subject to any future changes. It is suggested that you consult with a tax consultant

Sources: https://www.business-standard.com/article/finance/term-insurance-ownership-has-risen-to-43-from-36-in-two-years-ipq-survey-122022300838_1.html

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