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Benefits of a Term Insurance Plan

Jul 03, 2020 | 1 month ago | Read Time: 3 minutes | By iKnowledge Team
Term Insurance Benefits
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What is Term Insurance?

Before going into the details of term plan benefits, it is essential to understand what term insurance implies.

Term insurance offers life risk protection for a defined timeframe in exchange for a pre-specified premium. If an unfortunate incident happens within this term, the insurer pays death benefits to your nominee. The term insurance benefits that your nominee receives help them tide over financial hardships in the absence of your income. 

Term insurance is pure protection insurance with no investment element. However, new-age insurance companies offer unique term insurance with maturity benefiton survival.

What are Term Insurance Benefits?

1. Extensive life coverage for an affordable premium outlay

Since no cash value is involved, your entire term insurance premium covers the cost of insurance. Thus, the most remarkable among term plan benefits is that, for comparatively lower prices, you can acquire sizeable life coverage adequate for your needs. Moreover, the premiums are less for young applicants and remain fixed throughout the policy tenure. 

2. Flexibility in payments

You can pay the premium every month, bi-annually, or yearly as per your flow of cash. Single premium plans offer the opportunity to pay the entire premium at one go. It eliminates the hassles of missed payments and policy lapse.

3. Tax savings 

One of the most prominent term plan benefits is that the premiums are eligible for tax deductions up to ₹1.5 lakhs under Section 80C of the Income Tax Act (ITA), 1961. This benefit effectively reduces your tax burden. A person under the 30% tax bracket can save up to ₹46,800 with a term plan. Besides this facility, if you opt for health-related riders, you can get further rebates under Section 80D.

Moreover, the death benefits that your beneficiary receives are also tax-exempt, subject to the provisions of Section 10(10D) of ITA. 

4. Financial security with flexible payout options

Your family can use the lump-sum term plan benefits to meet liabilities like outstanding loans. They can invest the residue for substantial profits. If your beneficiaries need regular financial payouts, you can also arrange for monthly payouts to cover their living costs. Moreover, term insurance with maturity benefitprovides income in your retirement years as well.

5. Customizable coverage 

Riders increase term insurance benefits for a nominal cost. Such riders protect your family against all possible exigencies.

  • Critical illness coverage – On the first diagnosis of a covered critical ailment, the insurer offers a lump sum payout. The proceeds can fund your expensive treatments, keeping your savings intact.
  • Accidental death benefit – In case you meet a fatal accident, your family will receive extra payouts over the base sum assured. 
  • Waiver of premium – If you fail to continue paying your premiums due to causes covered under your plan, premium payment is waived off, and the life cover continues until the term ends. 
  • Income benefit – You can supplement the sum assured with a regular income for your family by opting for this rider.

What are the Benefits of Aegon Life’s Term Insurance Plan? 

  • Immediate life cover: In-built InstaCover feature assures instant issuance of coverage.
  • Cost-effective: Term insurance benefits of Aegon Life’s Term plan include low premiums, starting from ₹17/day for life cover of ₹50 lakhs. Women and non-smokers enjoy special rates.
  • Long-term protection: You can remain covered until age 100, ensuring financial and life cover in your advanced age.
  • Terminal illness support: Accelerated payout in life-threatening medical conditions provided.
  • Increasing coverage: You can increase your life cover after marriage and on the birth or adoption of children. 
  • Inflation-proof: The Protect Plus option auto-increases the cover by 5% every year while the premium remains constant.
  • Term insurance with maturity benefit: The Dual Protect option provides monthly incomes until policy maturity after your retirement. You will also receive a lump sum benefit after your 60th birthday.
  • Health incentives: Your premium reduces if you quit smoking. 
  • Multiple payment terms: You can choose from single pay, or regular payment options, or complete all payments within a limited time and enjoy life cover for the full tenure.
  • Three payout options: You can opt for lump-sum payouts, staggered payouts, or a combination of both as per your family’s needs. 
  • Attractive riders:
  • Lump sum payment on the first detection of 36 critical ailments
  • Waiver of future premiums in permanent disability or on contracting covered critical diseases
  • Additional payout in case of death due to accident
  • Hassle-free purchase: You can protect your family with term insurance benefits by purchasing Aegon’s Term plan online at your convenience.

Conclusion

The multiple term insurance benefits make these products valuable financial planning instruments. If you have financial dependents, you must shield them against any monetary crisis in your absence. And term insurance with maturity benefit will not only defend your family against such hardships but also ensure your financial independence in old age as well.


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Life Insurance Plan with 3 Options to Choose from

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Life Insurance Plan with 4 Options to Choose from

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