“I’ll send both my children to Australia for higher studies.” Rahul, my cousin, was busy in sharing his future dreams with me, when suddenly, he lost balance and our car collided with a fireworks-laden truck. Luckily, we both survived the accident, but Rahul lost his left leg. Suddenly, his bright future looked bleak, and all his dreams for his children shattered. The amount which he invested for his children’s future was usedin his treatment and other household expenses.
This is not the story of one person. After all, there are 16 deaths on Indian roads in every hour! There are many people like Rahul, who either die in accidents or become disabled due to any reason. We always blame the life for its uncertain behavior but never try to take steps to at least minimize its impact. Our identity revolves around our loved ones for whom we work endlessly to make their future bright. Therefore, it becomes important to place a safety net in case they fall, and we are not around to hold them. A term insurance plan protects our family financially so that theycontinue to enjoy a financially stable life after our death also. Iflike my cousin Rahul, an individual becomes disabled, there are various term insurance plans which offer disability coverage also.
Our identity revolves around our loved ones for whom we work endlessly to make their future
bright. So, it makes sense to buy a term insurance policy due to the following nine reasons:
1. Financial security: Term insurance provides a financial safety net for your family. It covers
both day to day expenses and milestones, like wedding, education, etc. If the sole
breadwinner in a family stops earning when affected by an unfortunate accident, the payout
offered by the life insurance policy will act as the income replacement while the family
adjusts and gets back on its feet. A term insurance is the single most responsible and selfless
act that someone can do for their family.
2. Safeguard against liabilities: During our lives, most of us take loans to buy a house, car,
etc. In case something happens to you, the burden of paying these liabilities falls on your
family. A term insurance assures that your family efficiently manages aforesaid financial
3. Gives health cover too: A term insurance secures your family after your death. But what if
you don’t die but become critically ill to continue your job? Apart from the mental trauma, it
would also cause a loss of income and rise in medical expenses. As you are alive and not
dead, your term plan will not help you. To fill the gap, you should go for a term plan with
critical illness benefit. Upon diagnosis of a critical ailment, like cancer, brain tumor, etc.; the
insurer pays a payment to the policyholder. This amount can be used to meet medical
expenses and other household expenses.
4. Peace of mind: Getting a term insurance policy can truly relieve you from a lot of stress.
Financial security goes a long way in keeping you mentally and emotionally happy. This, in
turn, brings good health.
5. Useful for nuclear families: Unlike old times, there are more nuclear families these days. It
means the only support to your family could be you. In your absence, they could face
difficulty in dealing with circumstances. Term insurance plans deal with such financial
repercussions in your absence.
6. Tax benefits: Term insurance policies with critical illness benefit give dual tax benefits
under both Section 80C and Section 80D of the Income Tax Act. Under Section 80C, the
maximum tax limit is Rs 1.5 lakh. Similarly, under Section 80D, the tax deduction on health
insurance premium is Rs 25,000 and for senior citizens, it is Rs 30,000.
Term insurance is a great investment that promises to protect you and your loved ones from
financial burden in times of an emergency. It gives you freedom to live your life freely without
worries. It’s a central part of your financial planning. With technological advancements, it is
worthwhile to go for an online term insurance plans that not only save your time but also prove to
be cost-effective. As there is no agent involved, the insurer saves a considerable amount on the
distribution, which is passed on to the policyholder in the form of low premium rates.
When taking out a policy, you need to go through the fine print carefully and only then sign off on
the documents when you’re sure that the policy protects your loved ones at all costs.
Also, don’t forget to check the insurer’s claim settlement, which helps you to know how much
claims the company is settling every year. A high claim settlement ratio means that the insurer is
settling most of its claims. Similarly, check the insurer’s solvency ratio, which shows the financial
stability of the company. A high solvency ratio indicates towards the good financial position of the