Term Life Insurance Plan: Key Features and Advantages Explained

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Are you considering a term life insurance plan for your portfolio? If yes, then you’re certainly on the right track. After all, securing the financial future of your loved ones should definitely be your first priority. In this context, it is vital to first execute this task with a term plan before moving to other investments. However, knowing more about these plans is imperative before going ahead with your investment. Here’s taking a closer look at some key features and benefits below. 

Biggest Benefits and Main Features of Term Life Insurance Plans 

A term life insurance plan offers multiple special features and unique benefits that you should learn more about. These include the following: 

  • Customizable Coverage- You can select a coverage amount that meets the future needs of your family should you pass away within the policy period. This can be calculated as a general guideline of 15-20 times your annual income, or after taking inflation, children’s higher education, debt repayment, and future household needs into account. 
  • Fixed Duration- Tenures usually vary between 5 and 40 years or even up to the age of 99, depending on the insurer and the type of policy. You can choose based on your specific needs. 
  • Reasonable Premium Amounts- Term life insurance plans have lower premiums than many other policies for relatively higher coverage amounts. 
  • Riders- You can boost your coverage by adding riders to your policy. These may include premium waivers, critical illnesses, and even accidental death/disability.  Terminal illness coverage is often included in the base policy. An extra premium has to be paid to avail of protection under these riders. 
  • Flexibility- Select the frequency of premium payments as per what you find convenient. This can be annually, monthly, or even quarterly. Some policies with “increasing cover” options may also allow you to scale up the coverage with the passage of time and increasing responsibilities. 
  • Financial Safety- As per the basic principle of term plans, the insurance company will pay out a sum assured to your nominees in case of your sudden demise within the policy term. This will give your loved ones adequate financial protection to tide over the economic impact of your absence. 
  • Tax-Related Advantages- The premiums you pay for term plans will get you deductions under Section 80C. However, for policies issued after 1 April 2023, if the total premium exceeds ₹5 lakhs in a financial year, the death benefit may not be fully exempted as per Section 10 (10D). 

Buy a Term Insurance Plan at the Earliest

You should purchase your term life insurance plan before everything else to financially safeguard your family at the earliest. Make sure you begin as early as possible. This will help you get more affordable term plans without compromising on coverage, and you can lock in the amount for the duration of the policy. Your family members can thus be secure from a financial perspective. Always ensure that you compare multiple policies and premiums before making a final decision. 

Always examine the CSR or claim settlement ratio of any insurer before going ahead. A high ratio indicates the insurer’s reliability in settling claims, although proper documentation and adherence to policy terms are equally important. On that note, here’s to finding the best-term plan to smoothen out your upcoming financial journey.