Why every family needs a term insurance plan?

Securing the financial future of your loved ones is more important than ever. Families in India encounter a variety of concerns, including health risks, economic hardships, and unexpected events. A term insurance policy may provide a dependable safety net, ensuring your family is financially secure even in your absence. It is an affordable approach to give complete coverage, making it necessary for every family. 

If you are looking into term insurance, choices such as a 1 crore term insurance policy provide significant coverage at low prices. But why is term insurance so important? Let’s go over the reasons in depth.

Reasons why every family needs a term insurance plan

Financial security for family

The primary purpose of a term insurance plan is to provide financial security to your family if something unexpected happens to you. A 1 crore term insurance ensures that your family will have the financial resources to maintain their standard of living without compromise. A term insurance plan is a kind of insurance cover that provides financial support to your family in case you are no longer around so that they can afford to live as they did even if you are no longer there.

High sum assured at affordable premiums

High coverage at very low premiums is one of the most attractive features of term insurance plans. Let’s assume that you can afford a 1 crore term insurance policy and so on. Term insurance plans are one of the most cost-effective ways to protect your family. 1 crore term insurance plans are something most families can afford, and with plans like these, you can get substantial coverage at affordable premiums.

Covers outstanding liabilities

For home purchases, higher education or personal reasons, families often take loans. A term insurance payout in the unfortunate event of your passing can pay off these outstanding liabilities, ensuring your family doesn’t end up stuck with debt. Very often, a term insurance payout helps your family to settle loans or debts like home mortgages, thereby protecting them from the financial burden after your death.

Child’s education and future

Every parent wishes to guarantee that their child’s education is not hampered by financial restraints. A term insurance policy can cover your child’s school expenditures, ensuring their future and giving them prospects for a better life. A term insurance payment can cover your child’s education, ensuring their future even if you are unable to support them.

Income replacement

The breadwinner’s income is important to most families for daily living expenses. A term insurance plan can come to the rescue, filling in this lost income and enabling your family to live their lives without any disruptions. The insurance payout can help cover your family’s regular expenses and they can live comfortably without you.

Tax benefits

Paying premiums for term insurance plans is tax deductible under Section 80C of the Income Tax Act. In addition, the death benefit is tax-free under Section 10(10D), so term insurance is a tax-efficient instrument to save and protect. If you pay premiums for term insurance, the amount paid is eligible for deduction under Section 80C while the death benefit is tax-free under Section 10(10D).

Peace of mind

It brings some peace to know that after your death your family will be financially stable. Term insurance plan ensures that the future of your loved ones is such that it removes stress and anxiety about the future. A term insurance plan provides you with peace of mind that your family’s financial future will be looked after, regardless of what life will throw at you.

Customised plans with riders

Most term insurance plans include optional riders, including critical illness coverage, accidental death benefits, and waiver of premium. They supplement your policy with broader coverage that’s right for you. You can add riders such as critical illness or accidental death to your term insurance, to add more comprehensive protection to your needs.

Long-term coverage

Typically, term insurance plans cover you for a period of 75 or 80 years. What that means is you can rest easy knowing that you have long-term protection without having to worry about having to renew your policy every year. Most term insurance plans cover you until age 75 or 80, meaning you can stay protected over the long term.

Simple to understand and manage

Term insurance is simpler than other types of life insurance. You pay recurring premiums, and your family receives the sum promised in the event of your death. There are no investment risks or fluctuations in returns, making it simple to handle. Term insurance is basic, with no hidden restrictions, making it a simple plan that provides clarity and peace of mind.

Increasing financial responsibilities

As your family grows, so do your financial responsibilities. A 1 crore term insurance plan ensures that your family remains adequately protected, even as your financial obligations increase. It becomes increasingly important as your responsibilities rise, helping to keep your family financially secure as expenses grow.

Lifestyle protection

Without the financial backup, maintaining your family’s current lifestyle after you are gone can be tough. A term insurance plan death benefit ensures that your family can meet their regular expenses (groceries, bills etc.) without having to significantly change their lifestyle. The death benefit will ensure your family can continue to live life, covering daily costs and long-term financial commitments.

Critical illness coverage

Many term insurance plans come with a critical illness add-on option. This rider is given keeping in mind the rising healthcare costs in India, so you and your family are financially protected in case of life-threatening diseases like cancer or heart disease. A critical illness rider helps protect your family from the escalating costs of healthcare when facing a life-threatening disease.

A safety net for non-earning spouses

In a family where one partner is the main earner, term insurance can fill the gap for the non-earning partner. It prevents them from being financially challenged and surviving comfortably on household expenses without you. A term insurance plan gives a non-earning spouse the ability to earn a living without having to depend on external financial aid.

Flexibility in choosing payout options

The payout options in a term insurance plan are flexible, which can be a lump sum or monthly instalments. By allowing your family to get the payout in a fashion most beneficial to their financial situation, you know they will have the funds when they need them most. You can choose between a lump sum or monthly instalments, giving your family flexibility in managing the payout based on their financial needs.

Ending note

Every family requires a term insurance policy to protect their financial future. The advantages are obvious: from financial security and income replacement to peace of mind and protection against increased obligations. A 1 crore term insurance plan, for example, gives extensive coverage at a low price, guaranteeing that your family can continue their current lifestyle, pay off debts, and cover critical future needs such as your child’s education. 

Furthermore, with tax breaks and customisable options, term insurance is a versatile and effective way to safeguard your loved ones. Investing in a term insurance policy is more than simply protection; it is about protecting the future and ensuring that your family’s needs are addressed even when you are not around.