We all work hard to ensure that we can provide a better future for ourselves and our loved ones. We want our loved ones to achieve all their dreams and goals seamlessly and without hassle. However, we do not know what our lives hold for us. Life is full of uncertainties and unpredictable events. Therefore, it is imperative to be prepared in advance to ensure that we do not face any constraints in the future. Investing in a life insurance policy is one of the best ways to secure the future of yourself and your loved ones and provide financial security in case of an unforeseen event. A life insurance policy provides us with a lump sum in the form of sum assured in case of any mishap and ensures that any financial restrictions in the future do not hold us back. Term insurance is one of the best life insurance policies to invest in. Moreover, one of the benefits of investing in this policy is that we are entitled to term insurance tax benefits.
Let us understand everything about what a term insurance policy is.
What is a Term Insurance Policy?
A term insurance policy is a type of life insurance policy wherein you pay a certain amount of premium to your insurance provider. In return, your insurance provider will provide you with the benefits of the term insurance policy.
In a term insurance policy, in case of an unforeseen and unfortunate event such as the policyholder’s death, your insurance provider will provide your family with a lump sum of sum assured as a death benefit. This will ensure that your family will face no financial restriction and seamlessly continue with their lives, even in your absence. One of the key benefits of investing in this policy is the term insurance tax benefits you are eligible for.
Let us briefly understand the benefits of investing in a term insurance plan.
Key Benefits of Investing in a Term Insurance Plan
1. Financial Security
Investing in a term insurance policy ensures that you and your family are financially secure, face no hassle in case of an unforeseen event, and can seamlessly continue with your lives.
2. Tax Benefits
One of the crucial advantages of investing in a term insurance plan is the term insurance tax benefits. The premiums you pay for the term insurance policy are eligible for tax benefits under Section 80C of the Income Tax Act. Under Section 80C of the Income Tax Act, the maximum term insurance tax benefits you can claim is up to Rs. 1.5 lakhs. However, tax laws are subject to change from time to time.
3. Affordable Premiums
Apart from term insurance tax benefits, another benefit of investing in a term insurance policy is affordable premiums. The premiums you pay for this policy are much more pocket-friendly and affordable than other life insurance policies.
4. Rider Benefits
Instead of investing in a new policy, you can avail rider benefits on the term insurance policy you have invested in. Rider benefits include accidental death rider benefit, critical health rider benefit, waiver of premium rider benefits, etc. Please note riders come at an additional cost, and are not mandatory.
5. Simplest Form of Life Insurance Policy
A term insurance policy is one of the simplest forms of life insurance policies that you can invest in. Unlike other life insurance policies, which can sometimes be quite complicated to understand, a term insurance policy is a simple policy wherein you pay the premiums and enjoy the benefits in return.
Wrapping Up
A term insurance policy is one of the simplest forms of life insurance policies to invest in and financially secure yourself and your loved ones. One of the key advantages of investing in this policy is term insurance tax benefits. Apart from tax benefits, you get to claim a lump sum amount of death benefit in case of an untimely death of the policyholder. As much as investing in a term insurance policy is crucial today, it is also important to go for a trusted and leading insurance provider.
