Term insurance is one of the most essential investment options you should consider. Not only is it a worthy investment in a protective life cover, but it also helps you reduce your tax liability. Yet, despite its many advantages, a large section of the country's population remains unprotected by life or term insurance. In fact, around 75% of Indians are underinsured
The situation is even more dismal among disabled and handicapped persons. To break this cycle, the first step is to understand what term insurance is all about.
A term insurance plan is a protective life cover offered by an insurance service provider. The insured and the insurer enter into a contract, where the policyholder agrees to pay a premium as a lump sum amount or as periodic payments in exchange for a financial safety net. If the policyholder passes away before the policy's term comes to an end, the beneficiary or nominee receives the death benefits promised under the term insurance plan.
Yes, handicapped and disabled persons are eligible to invest in term insurance plans. In fact, many leading insurance service providers offer specific plans tailored to provide term insurance for disabled persons. This is particularly useful in our country, considering the significant proportion of disabled people among the population. As per census records, around 26.8 million Indians suffer from disability. That translates to around 2 out of every 100 people in the country.
Term insurance for disabled persons can help handicapped and differently abled people ensure that the future of their family is safeguarded. Differently abled people can also benefit significantly by investing in term insurance for disabled persons.
Term insurance for disabled persons can help handicapped or differently abled people and their families in more ways than one. Here are some of the benefits associated with term insurance.
1.Financial assistance for the policyholder's beneficiaries
Term insurance for disabled persons involves payment of death benefits to the nominees in case the policyholder passes away during the term of the policy. If the insured was the sole or the primary breadwinner of the family, it may mean a loss of income for the surviving beneficiaries. The death benefits can help the family get through these tough times by ensuring that there's a financial safety net they can fall back on. It can be used to pay off debts left by the deceased or handle important expenses like tuition fees.
2.Monetary support to handle medical expenses
Managing disability can be expensive. It often involves frequent visits to the doctor to evaluate and manage the condition. Disabled persons may also require treatment to handle any complications that may arise from the underlying handicap. These factors typically lead to mounting medical expenses that can be tough on the wallet. Term insurance for disabled persons can help the insured meet these costs if the base plan is supplemented by additional riders, which most insurance companies offer.
3.Tax benefits to the investor
Disabled persons can also enjoy tax savings by investing in term insurance. Section 80C of the Income Tax Act provides that the premium paid by the investor can be deducted from their total income, thereby reducing the tax liability. The premium is deductible up to Rs. 1.5 lakhs. Additionally, the death benefits received by the nominee or beneficiary of the disabled person are also not taxable, owing to the provisions of section 10 (10D) of the Income Tax Act. Thus, by investing in term insurance, disabled persons can enjoy a protective cover and tax benefits.
Insurers tend to include certain special clauses for disabled persons, due to the higher degree of risk involved. So, investors with disability need to understand the terms associated with the coverage before purchasing a plan. If you're differently abled, you also need to take into account certain important factors, as explained below.
1.The cover offered
You need to ensure that the cover offered by the term insurance plan is adequate to get your beneficiaries through the financial crisis that may occur in case of your death. Look up the sum assured and calculate if it's enough to cover the annual expenses of your dependents.
2.The premium payable
The premium payable to purchase term insurance for disabled persons is generally higher than the regular premium charged. Nevertheless, ensure that the premium you need to pay is within your budget, so you reduce the risk of defaulting on the payment.
3.The rider options available
Term insurance often comes with additional covers such as accidental death benefit coverage, waiver of premium riders, or long-term care riders. For persons with disabilities, investing in riders can prove to be particularly useful. So, ensure that your term plan is enhanced by the right rider.
Term insurance can be purchased for disabled persons without any hassles. All you need to do is ensure that the cover offered by the insurer is adequate to cover your medical needs in case of any emergency, and your nominee's financial needs in the event of your demise. Canara HSBC Oriental Bank of Commerce offers many helpful features as part of the iSelect term plan. Among these are benefits like in-built terminal illness benefit, accidental death or disability cover, an incremental sum assured feature, and flexible death benefit payout options.
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