How a Good Term Life Insurance Sets You Free

Research suggests that people give preference to the life of their family members over their own. That is why, survival for your family if anything untoward befalls you, may bind your head into a spiral of worries.

Well, you can work hard, accumulate a lot of money and give your loved ones the best possible life and future. However, you will only realise that when you have achieved the said milestones. And while you are at it, nothing liberates you better than a good term insurance plan. It’s not simply about the life cover, as you very well know, even a large sum of money brings its own share of troubles.

The best term life insurance offers much more than just a large sum of money to your dependents and you. Here’s a list of traits the best term life insurance will offer that will give you a sense of freedom.

1. Adequate Cover

A few demands you will have from a term insurance plan are:

• Covers your family against the risk of disabilities and life-threatening illnesses as well
• Helps you determine your life insurance need
• Can offer to cover the entire amount

Untimely death is not the only risk you should protect against. Life-threatening illnesses like cancer and accidental disabilities can also have a potentially devastating effect on your family’s financial health. Thus, the best term plan should not only protect them from your untimely death but also from critical diseases and accidental effects.

2. Cost That Doesn’t Pinch Your Budget

Term insurance plan can offer adequate financial protection at nominal prices.

For example, if you are 30 years of age and a smoker your annual income is Rs. 10 Lakh, you can get a term cover of Rs. 1 crore at an annual premium of approximately Rs. 10,000. That comes around Rs. 834 per month. Perhaps, less than your monthly DTH bill.

3. Freedom from Income Worries

Now you can choose monthly income pay outs along with the one-time lump sum payment. Managing a large sum of money is a challenge many struggle with and safely generating regular income from it is an even bigger challenge.

Of course, you would want to avoid leaving your loved one with such challenges if anything untoward happens to you. Therefore, term insurance plans like Canara HSBC Life’s iSelect Star offer a monthly cash in-flow along with lump-sum payment.

For example, you can choose to give 50% of the sum assured as lump-sum while converting the rest into monthly income for the nominee. You can even choose a growing monthly income to take care of the inflation.

4. Freedom from Office Visits & Maze of Paperwork

In the era of e-commerce, it would be ridiculous if you still have to run from pillar to post with a bundle of papers; that too for something as essential as term insurance. Best term insurance plans are now available online.

At the max, you may need to visit the nearest authorised clinic for a health check-up. But that will again, only benefit you as you get a free health check-up. Rest of the documentation happens online, so you can buy the policy from the comfort of your home, especially during this desperate time, when staying at home has become the top priority for us.

5. Claim Settlement as Quick as a Wink

Best life insurance providers nowadays leverage technology to offer faster claim settlement so that your family doesn’t have to wait a long time or stress about the claim while grieving.

For example, Canara HSBC Life offers to settle a term insurance death claim within 24 hours if it is below Rs. 1 crore. Otherwise, claims larger than Rs. 1 crore may take up to 5 working days. (That is provided the claim meets the conditions for fast settlement and all relevant documents have been submitted.)

This is quite an improvement from the usual 30 to 90 days claim settlement period.

6. Freedom from Taxes

The premium you pay for your term insurance cover reduces your tax liability under section 80C. Any payments your family may receive from the life insurance policy after claim is also tax free under section 10(10D).

• Section 80C: Reduce your taxable income by up to Rs 1,50,000 per annum.
• Section 10(10D): The sum received from a life insurance policy on maturity or as death claim is exempt from tax.

7. Freedom from Premium Payment

You can think of two types of freedoms from premium payments:

• You don’t have to pay more than one premium
• Premiums are paid automatically without you having to look into it

A good term plan should offer both options. If you don’t want to bother about paying premiums for many years, you should have the option of a one-time payment. However, if you are salaried you can also choose to autopay the nominal premium amount from your account every month.

Compare Term Plans Before Buying:

As you can see, buying a term plan is not enough, since there are many other features to make your family’s life easier. It is always good to compare term plans and make sure you can have the most freedom at the end of it.