Why Term Plan Should Be Part of Your Financial Strategy

Vishal Pathak, Content Writer | Tuesday, 18 June 2024, 10:48 IST

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Why Term Plan Should Be Part of Your Financial StrategyBuilding a robust financial strategy for the future is something that you should un- doubtedly focus on. This should include safeguarding the financial future of your family members while also helping them realize their dreams even in your absence. This is where a term plan makes a strong case for itself. It should be an important addition to your financial strategy. Let us take a closer look at some of the reasons why these policies are worth considering.

Reasons to Buy a Term Plan Immediately

If you haven't purchased a suitable term plan yet, it's time to do so immediately. Why is this? Here are some reasons worth considering.

  1. Financial Security for Your Loved Ones- Term insurance policies offer complete life coverage for the policyholder. This means that in case of your demise within the policy tenure, the plan will pay out a lump sum to your nominees. This will financially secure them in your absence. They can invest the funds to maintain their lifestyles and meet monthly costs while also pursuing goals like higher education without any compromises. If there are any debts you have left behind, then those can also be repaid without your family’s security being affected. Hence, financial safety for your entire family is the biggest reason why you should invest in a term plan today.
  2. Comparatively Reasonable Premiums—Term insurance plans are some of the most affordable options currently available. They are pure coverage policies without any investment component. If you start young, you can get sizable coverage for a relatively lower premium amount that stays fixed throughout the policy tenure.
  3. Add-On Options- You can also personalize your term plan and widen the scope of its coverage with add-ons like riders. Some of them include critical illness, total or partial disability, accidental death, waiver of premium, and so on. These offer sufficient coverage in case of any unforeseen situations in life.
  4. Tax Deductions- You can get attractive tax deductions on your term insurance premiums as per Section 80C (up to Rs. 1.5 lakh). If you have added any health-related riders like critical illness to your term plan, then you can also get tax deductions under Section 80D on those premiums.
  5. Multiple Customization Options- Term plans can be easily customized in terms of increasing/decreasing coverage based on your requirements. You can also choose the death benefit type for your nominees, i.e. lump sum, monthly installment, or a mixture of both. You may cover your spouse under the same term insurance policy as well. These customization options make it easier for you to find a financial safety net for your family tailored to your specific requirements.

Hence, as can be seen, a term plan is the best and most important addition to any financial portfolio. You should always get term insurance as early as possible in life to avoid future issues.

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