The uncertainty of the future is an anxiety that most of the people who work for it. In a post-pandemic world, these anxieties have manifested into serious concerns, as the economies and lifestyles of many people have been affected in unprecedented ways. How to secure one’s future can be undertaken through insurance and investments made to financially support people in unforeseen circumstances. A term insurance plan is one of the most common and accessible insurance plans that can be used by an insured to secure their own future with their dependents.
A term plan is also an asset, which can help secure or repay long-term loans, even in the absence of the primary breadwinner. It is a resource to be used when unavoidable financial expenses have to be borne by the surviving beneficiaries in the absence of the policyholder.
Now that the basics of a term insurance plan have been laid, let’s take a closer look at the features that can be expected from the best term insurance plan in India, which can make it a vital financial cushion in difficult times. :
1. Premiums: A recurring feature in most life and term insurance plans in India is the nominal payment which is paid to the insurance provider by the policyholder on a regular basis throughout the term of the insurance. the police. This payment maintains the coverage provided by the insurance provider and is in addition to the payment that is insured to the beneficiary at the end of the policy term.
2. Duration of the policy: this is the duration of the cover determined and decided by the policyholder after consultation with the insurer. The term of the policy for a temporary plan is generally longer than most standard insurance plans. The duration of the best term insurance plan in India can vary between 25 and 30 years. The plan reaches maturity once the term has ended.
3. Insured death benefit: This is the promised payment amount promised to the beneficiary of the contract in the event of the death of the insured. This amount is usually a financial resource allowing the beneficiary to maintain their financial obligations after a disruption in income patterns.
4. Policyholder: The person who signs the insurance documents and handles the recurring premium payments and additional policy costs is the policyholder.
5. Insured: The person whose life is insured under the temporary plan is called the insured. It is in the case of this person that the insurer is required to process the amount of the insured payment to their beneficiaries.
6. Beneficiary / nominee: The person designated as the person to receive payment of the sum insured in the event of the death of the insured person is called the beneficiary or nominee. These are usually spouses, children or other family members who may be financially dependent on the insured.
Now that you know the meaning of nominee, it is the person stipulated in the policy document to whom the insured benefits will be passed on in the event that the insured person dies. This person can receive the death benefit payment according to the dictated payment type, which can be a one-time lump sum payment or an income-oriented installment payment.
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7. Runners: A term plan with its variations and abundance of options can be an ideal choice for people who wish to have solid financial visibility for any unforeseen situations that may arise in their life. Therefore, term insurance plans offer additional riders and benefits that can help policyholders prepare for situations that are not limited to death.
Income, waived premiums, disability, accidental death or even critical illness riders can be added to their existing term insurance plan. The cost of these riders being added to the cost of the basic premium, it is therefore necessary to choose after adequate deliberation.
8. Tax benefits: Premiums paid for a term plan and the payment sum thus received from it at the time of maturity are exempt from tax under Articles 80C and 10 (10D) of the Income Tax Act. , 1961.
A term plan is therefore an ideal choice of insurance and investment where the taxpayer can benefit from a tax deduction of up to Rs. 1.50,000 of their net taxable income as investment premiums that ‘they eventually paid.
The best term insurance plan in India can be expected to have all the features with the added benefit of having existing coverage. To learn more about the features of a term plan, you can contact insurers such as Max Life Insurance who can walk you through the term plan comparison process and create insurance solutions tailored to your needs. .