Know Why Term Insurance Is Key to Your Financial Plan

In the last few years, Indians have definitely observed a change in their spending habits. Moreover, the younger generation is more aware of their financial needs now than ever before, leading them to look for investment options and make choices that will reap benefits in the long run. 

Not only do they want to save towards early retirement, but they also invest in multiple instruments to create wealth and secure their family. Financial goals have changed for most of the earning population, with insurance policies now becoming more of a necessity than a mere tax-saving tool.

The new-age youth is interested in not only securing their future but also planning towards building a nest egg for their family to fall back on. Life insurance policies have become the need of the hour, and statistics already show the percentage increase in the number of people who are buying a term insurance plan for a well-balanced portfolio and financial stability for their entire family. 

Be Financially Stable With The Best Term Plan

Want to set the groundwork for financial stability and look after your family’s every need? One of the best answers to this question is buying the best term plan to cover your life. The key to planning your finances and enjoying a worry-free life lies in starting out early because, in simple terms, an early start equals better benefits and financial gains in the long run. 

While diversifying your investment portfolio to create wealth is always a good plan, you need to remember to add an insurance policy to make your portfolio complete.

If you are wondering why an insurance policy is so trivial to your financial planning and how you can benefit from this, then here are a few benefits of a term insurance plan that might interest you:

Opt For Financial Security That Is Not Complicated

New-age financial planning is definitely evolving with changing times, and earning individuals see the merit in diversifying their investments. One of the most important aspects of your financial portfolio would be an insurance plan, i.e., a financial cover that can take care of you and your family in unprecedented times. 

Opting for financial security that offers holistic coverage is the key here, and a term insurance policy would fit in perfectly. In today’s times, it is important that you know what is term plan and how you can make the most of it. By choosing term insurance, you will make accessibility to a lump sum amount easy for your family and without any hassles as well. 

Go For Premium Payment That Is Affordable 

How much cover can you afford in your term insurance policy largely depends on the needs of your family and the budget you have for insurance. Luckily, you do not have to worry about burning a hole in your pocket, as even the best term plan will usually have affordable premiums. Besides, you can also decide on the frequency of your premium payment to make it feasible for you to plan your investment and finances easily. 

Most insurance companies allow their policyholders to choose from a monthly, quarterly, or yearly premium payment option, making it easier for you to prioritise your expenses and even pay your premiums at ease. 

Customise Your Term Insurance Plan

Another major benefit that term insurance plans offer is the additional riders that policyholders get to choose from. You can select from accidental death cover, death benefit, survival benefit, partial or complete disability and ever waiver of premium, which are some of the most bought riders with a term insurance plan. 

While selecting the riders, it is important that you consult your family and know which riders would benefit them the most. Be sure to add these riders to your policy, as they often come at a nominal cost and can help you customise your insurance easily.

Claim Tax Benefits On Your Insurance

Under section 80C, an earning individual is allowed to claim tax deductions against the life insurance premiums they pay every year. The old tax regime in India offers this tax benefit for all policyholders. You can use an income tax calculator to plan your finances and pay your taxes without any financial strain. Make sure that your annual premiums do not exceed 10% of what is promised as your sum assured. 

Additionally, the sum assured a beneficiary would receive if the policyholder dies during the term would generally be tax-free as well. However, the interest earned on it is taxable, and you will need to disclose that as income when you file your taxes. 

There is a dire need for every earning individual to start planning finances from the early years and make investment a habit. Simply put, the earlier you start investing and paying premiums towards your insurance policy, the more beneficial it is for you and your family in the later years. 

Source:
https://www.incometaxindia.gov.in/Pages/tools/income-tax-calculator.aspx