Life after a person is gone may not be there, but through proper financial planning, you can ensure that your family will have a stable future even when you’re not around. Of all types of insurance, term insurance and term life insurance seem promising as a cost-effective panacea for the future security of your family.
In addition to term life insurance, it’s crucial to consider other protective measures for your family’s financial security. One such option is critical illness coverage, which provides a safety net in the event of a serious health diagnosis. This type of insurance ensures that you have the necessary funds to cover medical expenses and maintain your family’s lifestyle during challenging times. By integrating critical illness protection into your financial planning, you can enhance your family’s resilience against unforeseen health issues, offering peace of mind and stability for the future.
What is Term Insurance?
Term insurance is a simple form of life cover providing security to the family for a definite term. In case of death during that term, it offers the death benefit to the family by the insurance company. It cannot be compared with the other types of insurance because, just like all the other plans of insurance, it does not guarantee a maturity benefit. Thus, if the insured survives the term, then there is no benefit disbursal.
What is Term Life Insurance?
The term “term life insurance” is very commonly used interchangeably with term insurance, although in most instances, it underscores the larger concept of protection of life. Term life insurance ensures that your family or dependents get sufficient financial cover in case you happen to die during the tenure of the policy.
Key Features of Term Insurance and Term Life Insurance
Low Premium but High Coverage: Both term insurance and term life insurance are highly affordable ways of offering enormous financial security to your family. The reason why these policies have low premiums as compared to other life insurance products is that these policies are purely for paying life coverage without trying to save or invest money.
Death Benefit: The death benefit is what distinguishes the two types of insurance. Whenever the policyholder dies within the term of the policy, a lump sum is paid out to the beneficiaries. The payout may be utilized as a liquid order to service outstanding loans.
Customizable Policy Terms: In term insurance and term life insurance, one can choose the term of the policy according to the custom chosen and aspired. He may choose a short-term, medium-term, or long-term based on the nature of the liability.
Tax Benefits: Premiums of a term insurance or term life insurance paid are tax-free up to ₹1.5 lac under Section 80C of the Income Tax Act, 1961. Furthermore, the amount received by your nominee as a death benefit is tax-free under Section 10(10D).
Optional Riders: For extra security, term insurance as well as term life insurance offers different optional riders. Some of these are critical illness cover, accidental death benefit, waiver of premium, etc., which increase the value of your main scheme by protecting you in case of different events.
Why Do You Go for Term Life Insurance?
Financial Stability: Term life insurance offers death benefits. That means your dependents would not be financially strained upon your passing. Your lump sum can be used to clear the immediate costs, such as funeral costs, outstanding debts or mortgages, and then have something for the future.
Affordability: Though premium quotes are relatively low, term insurance can offer very high coverage without breaking the bank. This makes the scheme quite appealing to people who have recently started their careers or have other debt such as loan or mortgage commitments.
Easy to Comprehend: In comparison to the endowment or ULIP, wherein insurance is integrated with savings or investment, term life insurance can be rather straightforward. No complex returns or investment-linked components are involved.
Flexibility: With the on-demand availability of riders, term life insurance becomes customized according to your requirements. So, through this rider option, you can choose to include a rider that waives the premium in case of disability or critical illness so that your coverage will continue even when the going gets tough.
Key Features of the HDFC Life Insurance App
Simplified Policy Purchase: The app avails a very user-friendly interface that makes the quest for term life insurance plans easy to make as well as the computation for premiums and comparison of policies.
Policy Management: All term insurance or term life insurance policies in one place. The app allows you to pay your premiums, review policy details, and download documents in one central location for managing your coverage.
Online Payment Option with Premium: The mobile application offers great options for payments, which include auto debit for the premium subscriber, thus making the payment a smooth and hassle-free experience.
Claims Assistance: If your family ever needs to file a claim, the application offers assistance services. It allows for faster processing of claims making and tracking them in real-time, and hence helps your family members to obtain quick help in their hour of need.
Premium calculators: The premium calculator on the app considers your financial condition, liabilities, and future goals to ascertain how much coverage you may require. You will neither end up as underinsured nor overpay for extra coverage.
Customer Support: HDFC Life Insurance App provides 24/7 customer support with all your questions about your term life insurance policy.
How to Choose the Best Term Life Insurance Plan
Evaluate Your Needs: Consider your financial obligations, for instance, loans, mortgages, and future expenses such as your child’s education. The sum assured should be large enough to cater for all these liabilities so that your family is not left in financial shock.
Choose a Suitable Term: The term for the policy should run from when your family is most dependent on you for financial support. For example, if you have a 20-year mortgage, consider a policy term long enough to last at least the duration of your mortgage.
Keep an eye on inflation: Calculate inflation while selecting the coverage amount. Today, a suitable amount may not be sufficient in the future because the cost of living has increased as a result of inflation.
Riders: Choose riders that cover specific risks you may be exposed to. For example, if you have a family history of critical illness, adding critical illness rider cover will give you further security without buying another policy.
Conclusion
Securing a term life insurance policy is perhaps one of the most responsible decisions you can make for your family. It affords financial protection in your absence, such that the family can live life just as you would have, pay debts, and plan for the future. Platforms such as HDFC Life Insurance App make for easy buying, managing, and customizing at your convenience, according to your needs.