Insurance and Investments are two non-negotiable aspects of an earning individual lifestyle today. With the unpredictability of one’s future, income patterns and financial obligations; it is essential that a person find term insurance plans that duly fulfil every investment and insurance requirements they may have. A good plan always combines the benefits of present coverage with long-term security.
To be able to cater to an economic market as diverse as India, many insurance providers came up with insurance solutions tailor made for all kinds of needs and foreseeable situations.
The financial protection of loved ones apart from oneself is a recurrent concern across all families and people. Insurance plans have slowly grown into favour as essentials for people because of changing lifestyles and better financial literacy amongst people. To make small payments in order to prepare for the future is a simple activity, but it can greatly influence the lives of those dependent on it when the time arrives.
Term Insurance plans are types of insurance plans that value the importance of coverage and the financial security of one’s dependents in their absence. Keep reading to find out the fundamentals of what is term insurance plan and how to use a term life insurance calculator to aid the decision-making process.
A term insurance plan is an insurance instrument that enables the coverage of the needs of the insured and their dependents through an assured benefit sum in the event of the policyholder’s demise. A standard term insurance policy in India is considered to be one of the most affordable means of securing one’s future where premiums are low and one can customise their coverage and payout methods as per their convenience. One can use a term insurance calculator to aid their choice.
Term life insurance plans are useful investments as they can be beneficial to the policyholder for many reasons.
1. Low Premiums: The first expense a person considers while choosing an insurance plan is the premiums costs they may incur in the course of the policy tenure. Since a term insurance plan today qualifies as more of an asset than a supplementary policy; they are made with the goal of providing accessibility to financial security for people across all income brackets.
The premiums that are paid towards a term insurance plan can be as low as Rs 600 for a coverage of Rs 1 crore. These prices ensure affordability for the policyholder, and a significant amount for the dependents to avail in the event of the insured person’s passing or at the time of maturity. One can use a term life insurance calculator to calculate their projected premium expenses under various term life insurance plans.
2. Tax Benefits: Prospective policyholders are often wary of policies which have lump sum payout benefits, as they might as be considered an income which may increase one’s gross taxable income. But a term life insurance policy does not fall under the taxable payout policies. Since lawmakers understand the universality of needing to secure one’s future in the face of unforeseen emergencies; the premiums paid for a term insurance plan and the payout sum thus received from the same at the time of maturity is exempted from taxation under Section 80C and 10(10D) of the Income Tax Act, 1961.
Term insurance plans are therefore an ideal choice of insurance and investment where the taxpayer can avail a tax deduction of up to Rs. 1, 50,000 from their net taxable income on account of the investment premiums they may have paid.
3. Death Benefit: The coverage amount that a policyholder may decide on their beneficiaries receiving in the event of their death can be chosen as per their needs and financial structure. This death benefit sum is an essential monetary resource for the dependents to fulfil their expenses and goals. One can use a term life insurance calculator to gauge their projected coverage amount.
4. Customizable: Prospective term insurance plan policyholders can choose their payout method; as the beneficiary may not find it suitable to receive a large influx of money and manage it as per the needs of the family. They may benefit more from the lump sum being converted into a monthly, quarterly, bi-annual, or annual income as per their requirement.
With a nominal amount paid over the existing premium plan, a policyholder can secure the additional cover provided under various riders that are made to protect the policyholder from situations apart from death.
There are riders available in term insurance for situations such as Accidental Death, Critical Illness, and Disability.
Since term life insurance plans are important assets for a person to have, new policyholders may want to invest in one to secure the future of their loved ones. In order to make an informed choice; one can use many of the online resources available for perusing. A term life insurance calculator one such tool that a person can use before purchasing a plan.
A term insurance calculator is an online tool that helps a person to get an approximate quote as to the premium investment they would have to make for towards their term insurance on the basis of their income, age group, monetary liabilities. A term insurance calculator can also calculate the required amount of coverage under the ideal plan a potential policyholder ought to avail according to the aforementioned metrics.
Head over Max Life Insurance’s website to our term life insurance calculator and find your ideal term plan as per your requirements under 10 mins, and mitigate your anxieties about the future in a seamless manner.