Importance and Benefits of Term Life Insurance
Life is uncertain and you can’t predict what the future holds. You have to make sure your family is financially secured in your absence. Term life insurance provides an affordable way to financially protect your family. It acts as an important financial safety net if you were to pass away untimely.
What Is Term Life Insurance?
Term life insurance is an insurance policy that offers coverage for a set period or a specified term of years. A specified term of years is the number of years that the insurance policy protects your beneficiaries.
Term life insurance is one of the most affordable types of life insurance coverage and its length often varies from 10 to 30 years.
This insurance policy works as if you were to die during the term of this policy, the insurance payout which is also known as death benefit would go to your beneficiaries. And it depends on your loved ones, how they’re going to use it.
The death benefit can go towards your child’s education, your partner’s mortgage, or paying off existing debts and it can also help your family financially in the event of your death.
Importance of Term Life Insurance
Everyone knows the importance of term life insurance but many people ignore the reality of what would happen to their loved ones if they were to die unexpectedly without the proper protection. Here are a few reasons why term life insurance is not an option but a necessity.
- Protection of your kids: A term life insurance will ensure that your kids can continue their education, buy a home, or even pay for their wedding if you pass away suddenly.
- Peace of mind: A term life insurance is an affordable way to potentially provide peace of mind to you and your family. You’ll be ensured that your loved ones will be protected if something happens to you. You’ll likely not have to worry about the future, knowing that your family will be able to continue their current standard of life.
- Debts payment: Debts can be a burden to your family when you pass away without any protection but Term life insurance can pay off all the existing debts that you leave behind. Debts such as credit cards, mortgages, and car loans can have a dramatic impact on your loved ones when you die.
- Funeral expenses: A typical funeral can cost almost $7,000 to $10,000, which might be very hard for your family to afford at a stressful time. A term life insurance will make sure your funeral expenses are covered so your family doesn’t have to worry about such costs.
- Protection of your business: If you’re using term life insurance to insure a key employee of your business or provide tax-free cash infusion, this policy can be a major asset to your business.
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Benefits of Term Life Insurance
Term life insurance is considered to be one of the most important types of insurance policies. It not only provides death benefits to your family but also offers tax benefits. Some of the common advantages of term life insurance are mentioned below.
- Easy to understand: Unlike other types of life insurance, term life insurance plans are quite easy to understand, it doesn’t have any investment component in it. Here you simply have to pay premiums and the insurer covers your life for a specific period to provide the term life benefits.
- Affordable premiums: One of the primary benefits of term life insurance is its affordable cost. As compared to other types of life insurance policies, it is typically less expensive. Moreover, online channels like Ladder offer term life insurance coverage at an affordable price as compared to offline channels.
- Income tax benefits: Term life insurance will provide tax benefits within two sections of the income tax Act. In section 80C, you can get tax benefits on the premium that is paid towards this insurance policy. While in section 10 (10D), you get tax benefits with special regards to TROP (Term Return of Premium Plan) which is also tax exempted.
- Additional rider benefits: You can easily strengthen your term life insurance policy by opting for additional rider benefits options. These additional rider benefits are provided by almost any insurance company, however, you’ll need to pay an additional price for it.
The popularity of Term life insurance is increasing day-to-day due to the inherent benefits at the affordable premium, tax benefits, and peace of mind with regards to the protection of our loved ones. The premium you pay is small as compared to the numerous benefits of the term life insurance policy.
>> You can simply start protecting your family today with Ladder now.
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REFERENCES
https://www.maxlifeinsurance.com/blog/term-insurance/benefits-of-term-insurance
https://www.investopedia.com/ask/answers/08/term-life-insurance.asp
https://www.nerdwallet.com/article/insurance/benefits-of-term-life-insurance
https://www.thinkadvisor.com/2016/07/17/10-advantages-of-term-life-insurance/
https://www.etmoney.com/blog/top-5-benefits-of-term-insurance/
https://www.trustedchoice.com/life-insurance/coverage-basics/why-life-insurance-important/
https://www.avivaindia.com/insurance-guide/top-10-reasons-why-term-insurance-plans-are-must-have
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