Life is uncertain with a plethora of sudden events, sometimes even causing an untimely death of a dear one. However, when the deceased person is the breadwinner of the family, it leads to facing a huge financial crisis. In such unforeseen circumstances, financial security is not sought and leads to complexities and an unsafe future of the family. This is exactly where the term insurance concept comes into the limelight. 

What is Term Insurance? 

A term insurance plan is a form of life insurance that protects your family against your premature death, to fill up the financial void. The policy offers high coverage for affordable premiums, vouching for a large sum of money to your family in your absence. Term insurance policy is one of the starting points for families to trace a sound financial plan. 

Benefits of term insurance 

• Provides financial security: What differentiates permanent plans from term insurance is that it ensures high coverage at affordable premiums. Permanent plans are known for guaranteed returns whereas term insurance is known to benefit you with a large sum of money at relatively lower costs. This means that your liabilities can be handled at an ease with a strong foundation of financial security.
• Flexible and Affordable: From 1-year to 30-year plans, you have the flexibility to pick either shorter or longer durations based on your commitments, liabilities and assets. Furthermore, there is no need for you to shell out the king’s ransom. Since, along with being economical, the term insurance vouches for higher coverage.
• Easy to Comprehend: The term insurance is easy to comprehend because of its breakdown into three components: coverage amount, length of term plan and premiums amount. This makes it super-easy to handle wherein you can take guidance from financial novices as well.
• Tax benefits: There are scores of legal tax benefits when it comes to the Term Insurance: 

1. 1. Under Section 80C, life insurance premiums up to 1.5 lakh per annum are exempted under the Income Tax Act.
   2. Under Section 10(D), the payout that term plans offer on the maturity and/or death of the policyholder is fully exempt according to the Income Tax Act.
   3. Deduction under Section 80D of the Income Tax Act, if you have opted for a health-related rider along with your term insurance policy (for e.g.: Critical Illness Rider), you can claim deductions of up to Rs. 25,000 on the premiums paid towards your policy.

Types of Term Insurance Plans

Before signing the dotted line, it is significant to go through the variants of the term insurance plans. The variants ensure that you can pick the best option on the basis of needs, liabilities, and terms. Let’s take a look at them, shall we? 

• Level Term Plans 
• Increasing Term Plans 
• Decreasing Term Plans 
• Term insurance with Return of Premium
• Group Term Insurance Plans
• Convertible Term Plans 
• Term Plans with Riders 

Importance of Term Insurance 

Unforeseen casualties are never hit with a warning and life is unpredictable, with fewer things under our control. Thus, term insurance acts as a safety belt for your family supporting them financially in case of sudden demise. Furthermore, there is a myriad range of benefits apart from monetary benefits, which will stabilize your family in your absence. 

Who should buy Term Insurance Plans?

This is a pertinent question that needs to be addressed with a clear answer to ensure that merely the ones who need it must buy a term insurance plan. Check if you fit under the category. 

1. You are a breadwinner of the family 
2. Your close-knitted family is financially dependent on you and has no other support in terms of income
3. You have certain financial goals for yourself and your family’s welfare

Difference between Term Insurance and Life Insurance

Let’s outline the difference between term insurance and life insurance under different headers. 

1. Coverage: Term insurance vouches for the coverage of premature death, which means that the benefit is paid only under the demise of the insured person. Whereas, life insurance pays a benefit even if the insured person survives till the agreed period. 
2. Duration: The ideal policy term for term insurance covers between 5 to 50 years of tenure or up to the age of 85 years. There are select companies that cover the insured till the age of 100 years. Whereas, when it comes to life insurance, it holds the policy term up to 100 years of age. 
3. Bonus: Term insurance is merely limited to the basic sum of money whereas life insurance offers loyalty benefits, policy benefits, guaranteed additions, and much more. 

In a nutshell, both the plans have their own relevance as per personal individual needs. Thus, you must understand which one suits your financial goals the best. In no small measure, the right plan is a stepping-stone towards a sound financial strategy for your family. 

How can a financial advisor help you in choosing the right term insurance plan?

Picking the right financial advisor is the key to chalk out clear financial goals with a simplified investment portfolio. The credible sources ensure that you pay for what you need and don’t end up with unnecessary drills in your money wallet. Furthermore, the right financial advisor ensures that your family can live with dignity and have strong financial support in your absence. If you are looking for professionals to help with the ideal term insurance plans, this is your sign. Find yourself the right financial advisor and secure your family financially.