Is it Good to Buy a Term Insurance Plan in 2023?

Investment planning is as crucial as earning a livelihood. For the key earning member of a family, it is all the more essential to secure their dependents with a financial cushion. For a long time, term insurance plans have been used by people to secure the lives of their loved ones. Being cost-effective and reliable, term plans serve as a safety net during sudden emergency situations.    

Unlike earlier buying a term plan is no longer a tedious task as it can be done easily online. It is important to choose the best term insurance policy and add it to your investment portfolio while planning your future investments.

So, is it a financially sound decision to buy a term insurance plan in the year 2023? Let us find out!

What do you Understand about Term Insurance?

Term insurance plan is a life insurance product that allows a cost-effective way to secure a family in case of the sudden demise of the policyholder. Term plans offer death benefits to the nominee when the insured is no more or when the insured dies (during the policy tenure). It is an ideal investment option as it is cost-effective and easily accessible. Moreover, since unforeseen situations do not come with prior notice, investing in a term plan is important. This will ensure your family’s financial crisis is handled even when you are not around.

Why to Buy Term Insurance?

Term insurance is an effective way to secure your family. Below are some reasons why one should buy term insurance in India:

What are the Benefits of Purchasing Term Insurance  Policies?

As already stated, there are several benefits of purchasing term plans. Some  of them are mentioned below:

1. Offers High Coverage/Sum Assured:

Term plans are simple life insurance plans available at a low premium price. Hence these policies are easy on the pocket. Buying a term plan at a young age will allow you to avail the plan at a low price. Further, buying plans online also allows further discounts and benefits.

2. Tax Benefits u/s 80D, 80C, 10(10D):

Term insurance aims to secure your family’s financial future. But it has another benefit as well, and that is the tax benefit. So, under term insurance, you can claim a deduction of up to INR 1.5 lakh under section 80C of income tax. Likewise, you can also claim a tax deduction of up to INR 25,000 u/s 80D of income tax if you are paying a premium for a critical illness rider.

Further, you may also note that the death benefit claimed by the nominee at the time of payout is completely tax exempted under term plans.

3. Easy to Understand Plans:

The term insurance policies are easy to comprehend, and thus they are mostly preferred by people. Term plans are pure life cover focused on financially supporting your dependents. A policyholder must pay the premium of the plan on time to continue availing of the benefits of the plan.

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What Factors should be Considered While Buying a Term Insurance Policy?

There are several important variables which need consideration at the time of buying term insurance online:

• You should consider the coverage requirements of your family. Depending on the size of your family and the number of dependents, you can  decide the coverage amount you want for your term plan
• The next thing to consider is the tenure of policy that you are looking for. So, depending on your requirement, you can check for how many years you want to stay covered under the plan.
• Several additional riders are available with term plans, which you can opt for to enhance the coverage of your plan at a nominal extra cost.
• The claim settlement ratio is another crucial aspect that needs to be considered while buying a term insurance policy.

Popular Life Insurance Companies India, 2023

To Sum Up

A term insurance plan is an agreement between an insurer and a policyholder. Term plan is an investment that secures a family financially. Hence it is advisable to invest in such plans. Moreover, the term plans can be easily bought online. But it is good to research and compare plans before buying them to get the best deal and save money.

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