A term insurance plan serves several purposes under one plan. It protects a family’s finances in the absence of the earning member, provides support in difficult times, and has several other monetary benefits. But if you need solid arguments in favour of a term life insurance policy to motivate you to purchase one, here is the solution. Read on as we detail six of the most prominent arguments for term insurance plans.
#1: Term insurance plans provide protection against uncertainties in life
The first major argument for having term insurance is one that almost everybody knows. It provides protection against uncertainties of life. The well-being of family members and dependents is the cause of worry for several single earning members. And term life insurance can be the best option that specifically takes care of the dependents without any surcharges.
#2: Term insurance protects the family in financial dilemmas
As seen in society, there are several financial distresses followed by a death in a family. Especially if the member was the main breadwinner and other sources of income are too limited to suffice the expenses. Term life insurances protect the families or dependents against financial troubles due to loss of income. The funds received from the policy will be sufficient for the forthcoming living expenditures. Several dependants like children, unemployed spouses, elderly parents, or extended family prefer these plans for this sole reason. It will help you too to protect your loved ones from such dilemmas.
#3: Term insurance takes care of children and their needs
Several people also prefer term life insurance due to the assistance children obtain from it. People often invest in term insurance as a backup plan to cover the educational and plans of the children. And this is not only limited to maturity upon a sad demise. As term life insurances have survival benefits and return of premium at term end, people use term life insurances as child education plans. Through this, they purchase term insurance in a child’s name and, upon maturity, use the return funds to pay for the excessive cost of higher education. And as these plans are for children, the government provides several monetary benefits like increased interest rates, tax deductions, and incentives.
#4: Term insurance plan is the most reliable mode of investment with life cover
Individuals choose several savings and investment options to protect the family’s finances. But even if these modes have the possibility of a higher rate of returns, the problem lies in capital protection. And if they have capital protection, then there are limitations on the interest rates and benefits. Instruments like equity, bonds, mutual funds, and trading come under the former category. And fixed deposits, savings schemes, gold, assets, and properties come under the latter category. But term insurance plans can provide capital protection and a decently higher rate of returns.
#5: Term insurance plans have the maximum tax deduction
A term life insurance policy has several tax benefits, especially if they are meant for people outside the age of legal income eligibility. It means the policies under the name of people below 18 and above 60 have the maximum income tax deductions on the taxable income for the one who pays the premium. And so, if you purchase a policy for people belonging to these age categories, you can pay a decreased income tax.
#6: Term insurance plans provide maximum returns even with least premiums
The term insurance plans don’t need to have a high premium and return on invested capital. Some schemes don’t provide a return of money on survival but have a lesser premium. These schemes will only have a limited maturity benefit for the nominee, but the premium is almost negligible if it is a government scheme. You can invest as low as INR 500 per year in such schemes. The government and insurers ensure that even economically weaker families have access to term insurance through such schemes.
Now you must have a clear understanding through these arguments advocating the need for term life insurance. These will help you understand the benefits that it provides, monetary and emotional.