Top Benefits To Consider While Buying A Term Insurance Plan

18 lakh salary as an employee of a Mumbai-based consulting firm. Manish has 3 dependent family members. Wife Ramya is a homemaker & the couple has 2 young children - a 7-year-old son & a 3-year-old daughter. Manish is extremely hardworking & ambitious. He is investing all his time, money & energy into building a comfortable life for his dear family. He recently bought a new house near his office. The outstanding housing loan amounts to Rs. 80 lakh.

Manish has been stressed lately as a shattering question, which he doesn’t have answers to, keeps him awake all night - ‘How will my family manage all these financial commitments single-handedly if something unfortunate happens to me all of a sudden?’

This is indeed every sole breadwinner’s plight in any family while planning their financial journey. This nerve-racking thought knocks on your door, especially during your prime earning years, when

• You are the key earner
• Your loved ones are dependent on your source of regular income
• Your children are very young & their future feels unstable because of life’s uncertainties
• Your parents, spouse & siblings are not financially stable to pay off your debts in case something wrong happens to you.

This is why term insurance is important. The best term insurance plan acts like a financial shield, safeguarding your loved ones from immediate financial distress upon your untimely death. It provides them with the much-needed financial relief in your absence to clear off loans, maintain their standard of living, fund urgent & bigger financial responsibilities like your child’s academic needs / wedding expenses, take care of your spouse’s retirement safety net & parents’ medical expenses.

Mahesh’s one smart decision to compare different term insurance plans & invest in the Ageas Federal’s term plan keeps him mentally free today with the assurance that his family need not depend financially on anyone if something untoward ever happens to him. His family’s bright future, their dreams for life & their bigger goals in terms of education, marriage & retirement are protected by the term plan coverage.

So, who should buy term insurance?

Term insurance is an excellent product for anyone like Mahesh who is basically a sole bread earner, with dependents living off their monthly income, who can be most affected by any uncertainty (in this case, the breadwinner’s demise). Who else can consider adding term insurance to their smart financial plan?

• Young working professionals or individuals just starting out in their careers
• Couples who have married recently to secure the spouse’s financial future
• Married individuals planning for a family soon
• New parents or parents with small children
• People who have recently taken huge loans for purchasing their dream house, or for other liabilities (like education, car, etc.)
• Key stakeholders in other ventures/business owners
• Middle-aged individuals who are expecting bigger expenses in the future or have long-term commitments like their child’s overseas education, wedding expenses, etc.
• People looking for tax-efficient financial products

The bottom line: Mahesh’s financial commitments towards family shall be taken care of with the amount received from the death benefit if he passes away during the policy term. His debts & liabilities need not be carried forward & passed on to the next generation, they can instead be easily settled with the payout (i.e. the sum assured he chose at the start based on his financial situation, family’s lifestyle & their future milestones) received by the nominee, who is appointed by the policyholder.

Key Benefits Of Term Insurance:

1. Disciplined savings habit
   A term insurance plan is one of the simplest, most affordable & effective ways to commit to financial discipline in life. Regular fixed premiums x long policy term = huge safety corpus in the form of life protection cover for your family upon your untimely demise.
2. Goal-based planning
   Your long-term financial commitments, like children’s education or home ownership, are secured with the sum assured (death benefit) received from the term plan, even when you aren’t around to see your dreams materialize.
3. Long-term coverage
   Uncertainties like accidents, illnesses, or untimely death can cause your life & your finances to come to an abrupt halt. With the best term insurance plan rushing to their rescue, your family’s financial future isn’t derailed, no matter what. One of the most attractive benefits of term insurance is that it can cover your loved ones, maximizing financial stability for them all along your prime working years & even until you are 80-85 years old, depending on the plan & the insurer.
4. Payout flexibility
   
   • Would you like for your family to receive the payout as a lump sum amount in one go? “Yes, done!”
   • As a regular income every month? “Yes, sorted!”
   • Or as a combination of both options? “Yes, payouts can be customized!”
   • In other words, you just ask & the term plan truly delivers - both immediate & lifelong support!
5. Option to increase sum assured
   Some term plans come with the option to increase coverage in alignment with your financial responsibilities during different life stages such as your marriage, your child’s birth etc. Through this, the sum assured keeps growing to match your growing list of commitments. Suppose you start with Rs. 50 lakh cover at age 28, it can be increased to Rs. 1 crore at age 32 after marriage & further to Rs. 1.5 crore at age 35 after having a child. Also Read: 7 Factors That Affect The Term Insurance Premium
6. Peace of mind
   The best term insurance plan gives you complete peace of mind that your family’s future is in safe hands, even when you aren’t around. You can now shift your focus to several other things, like your own professional development, living life to the fullest & building wealth by investing money in other instruments.
7. Optional add-on riders
   For comprehensive coverage & enhanced protection, you can add riders like critical illness cover, accidental death cover, waiver of premium on disability & income benefit rider to your base term plan. That is, if you add a critical illness rider, you can get a lump sum payout if diagnosed with any major illness like cancer, thus helping in paying off the medical bills.
8. Tax benefits
   Now that you know what a term plan is, you must also know the tax benefits on term insurance: the premiums qualify for tax deductions under section 80C (up to Rs. 1.5 lakh annually) & the death benefit received is tax-free under section 10(10D). Also Read: Top 10 Reasons To Buy Term Insurance Plan
9. Low premium, higher coverage
   Starting young & early helps unlock a significant sum assured for a very low premium. No strain on the current cash flow situation, i.e. a 30-year-old non-smoker can get a Rs. 1 crore term plan for as low as Rs. 800 - Rs. 1,000 per month.
10. Sample Illustrations:
    

    Example 1	Young Professional	Neeraj, 31, a marketing professional in Bangalore, recently bought his first car. He is planning to buy a house in the next four years. He has got himself a term insurance plan from Ageas Federal, with a sum assured of Rs. 1 crore to match his family’s future needs. Policy duration - 25 years & monthly premium - Rs. 750. Neeraj now enjoys mental peace, knowing that even if anything happens to him, his aged parents need not struggle with any future liabilities like the home loan or car loan because the term plan purchased today will come handy then.
    Example 2	Young Family	Sapna, 36, is a young mother of two children, working as a software engineer in Chennai. She has chosen a term plan with an increasing cover option. She has started with a Rs. 50 lakh cover, however, the term insurance plan will automatically transition to Rs. 1.5 crore cover over time. This supports her growing responsibilities as a working mother. This way, her children’s higher education costs & her family’s future lifestyle needs can be efficiently managed with the payout from the term plan, even when she isn’t around.
    Example 3	Loan Protection	Prithvi, 42, a Mumbai-based entrepreneur, has taken a 15-year housing loan (outstanding amount: Rs. 90 lakh). In case of any unfortunate event ever, Prithvi wants to make sure his wife doesn’t need to sell any assets (jewellery / shares) to pay off the huge debts. With the Ageas Federal Rs. 2 crore term insurance cover that he has bought, his wife can clear the home loan easily, while still having enough funds left to sustain everyday household expenses after his death.
    Example 4	Health Situation	Pooja, a Delhiite, 26, an IT professional, had added a critical illness rider to her Ageas Federal Rs. 1 crore term plan. Unfortunately, today at age 37, she has been diagnosed with early-stage breast cancer. With the help of the add-on rider, she has received a lump sum payout of Rs. 20 lakh to cover urgent medical expenses. Pooja is focusing fully on her cancer treatment, while her term insurance policy is working harder behind the scenes to ensure that she doesn’t have to worry about funding the medical bills.

    
    Every family’s needs are unique, and the right cover can make all the difference. Contact us today to explore the best term plan options for you.