Strategic Safeguards: How Term Insurance Benefits Fit Your Financial Plan?

In the rollercoaster of finances, planning for the future often requires strategic thinking. Amidst our aspirations and daily commitments,it becomes imperative to safeguard our loved ones. This is where the term insurance plan comes into play.

Term insurance is enough to support you in testing times, ensuring financial stability without affecting your regular expenses. If you are a novice to term insurance plans, we have curated this blog to enhance your understanding.

Let’s learn more about term insurance, its types, benefits, and the way it helps you maintain financial well-being. 

Fundamentals of a Term Insurance Plan

Term insurance is a financial security that provides coverage for a specified period or term.If the policyholder passes away during this term, the insurance company pays a predetermined sum assured to the nominee.It’s a straightforward and affordable way to secure your family’s financial future in case of any unforeseen circumstances.

Now, let’s look at some of the types of term insurance plans:

1. Level Term Insurance: In this plan, the sum assured remains constant throughout the policy term. Premiums also remain fixed, providing predictability in payments and coverage.
2. Decreasing Term Insurance: Unlike level-term insurance, the sum assured decreases gradually over the policy period. You can choose it to cover liabilities like loans, aligning with the reducing financial burden.
3. Increasing Term Insurance: This plan offers an increasing sum assured over time. It safeguards against inflation and growing financial needs, ensuring the coverage keeps pace with the rising cost of living.
4. Return of Premium Term Insurance: This policy variant refunds the total premiums paid if the policyholder survives the term. It combines protection and savings, making it an attractive option despite slightly higher premiums.
5. Convertible Term Insurance: This plan allows policyholders to convert their term policy into a whole life or endowment plan within a specified period. Offers flexibility to adapt to changing financial needs.
6. Joint Term Insurance: Designed to cover both spouses under a single policy, providing financial protection in the event of either spouse’s demise. It is a cost-effective option for couples seeking joint coverage.
7. Term Insurance with Riders: These plans offer supplementary coverage through riders like critical illness, accidental death, disability, or income benefit, enhancing the overall protection of the policy.

Who Should Apply for a Term Insurance Plan?

To apply for a term insurance plan, there are certain terms and conditions. If you fall in the following category, it is best to apply for it:

• Parents
• Self-Employed
• Working women
• Young professionals
• Newly-married Couples

Term Insurance Benefits in Your Financial Plan

Let’s shed light on some specific term insurance benefits offered within your financial planning:

1. Financial Protection: Term insurance acts as a safe shield, providing a lump sum amount to your family in the event of your untimely demise. This financial cushion helps cover daily expenses, outstanding debts, children’s education, and other financial obligations.
2. Cost-Effective Solution: One of the most beneficial aspects of term insurance is its affordability. For a relatively nominal premium, you can secure substantial coverage. This makes it an accessible option for individuals across different income brackets.
3. Income Replacement: Like your income supports your family’s lifestyle, future plans, and daily needs, term insurance acts as an income replacement tool. It keeps providing financial support in your absence to continue life’s journey.
4. Flexibility and Customisation: Term insurance policies are highly customisable. They can be altered to meet your specific requirements. It allows you to choose the coverage amount, policy term, and additional riders according to your family’s needs.
5. Term Insurance Tax Benefits: Term insurance also provides financial security.The premiums paid for term insurance are eligible for tax deductions under Section 80C, Income Tax Act. It helps you save a significant amount on taxes. Term insurance tax benefit 80D is that the nominee is free from paying any taxes on the plan.

Plan Smart to Leverage Term Insurance Tax Benefits

In a country where bonds hold immense importance, term insurance emerges as a strategic safeguard. With this plan, you can stay worry-free in providing financial support to your family in your absence. 

Financial planning today saves your family’s future tomorrow. Based on your financial standing, choose the best type of term insurance plan. Many online lenders help you get term insurance tax benefits with the lucrative features of the plan. Among the top providers, you can reach out to Canara HSBC Life Insurance. They are known to be one such reliable provider that facilitates term insurance on favourable terms and conditions.

So, strategise wisely and choose a plan today to get maximum term insurance tax benefits!