As you may already know, a term life insurance policy is a kind of life insurance that covers you for a specific period. Although it doesn’t provide any maturity benefits, it keeps your family’s future secured by covering you at the most crucial phase of your life.
Unlike other policies, it also doesn’t provide any investment options, which means there is no scope of capital appreciation with standard term plans. However, with the introduction of a term plan with a return of premium option, things seem to change.
A lot of people hesitated in purchasing a term life insurance policy as it doesn’t provide anything in case you survive throughout the policy tenure. But, with certain plans like Canara HSBC OBC iSelect Star Term Plan, you can get all the premiums you’ve paid back in case of your survival.
This not only makes it a perfect investment option for the financial safety of you and your family but also provides you with the ability to accumulate your capital for later usage. It is essentially a combined benefit of life insurance and investments at the price of a term plan.
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Life-Saving and Investment Benefits of Term Plan
1. High Sum Assured at Low Premiums
Term insurance is one of the simplest life insurance products available in the market. The reason why it’s popular among people is because of its affordable cost. In comparison to other life insurance plans, term plans require very affordable premiums.
Moreover, the earlier you purchase a term plan, the lower your premiums will be. If you choose to purchase the plan online, you can save even more. Term plans are known for their cost-saving properties and provide a high sum assured for your family’s safety.
2. Flexible Payout Options for Financial Security
A term plan provides multiple payout options based on the financial requirements of your family in the event of your unfortunate death. If you have any existing financial liabilities like loans or mortgages, your dependents can choose to receive a lump-sum payout to pay off your debt.
Alternatively, they can also opt-in for recurring monthly payout to sustain their day-to-day expenses. Moreover, a term plan with a return of premium option can help you with financial resources for your retirement corpus as well.
3. Tax Benefits for Further Savings
With a term life insurance plan, you can also enjoy term insurance tax benefits on the premiums you pay towards the insurance benefits under section 80C and on the death benefit offered by the plan under section 10(10D) of the Income Tax Act of India.
The exemption has a maximum limit of Rs. 1.5 Lakh per year. To make the most out of these tax benefits, you can purchase a term plan for the maximum coverage that can be offered to you based on your health, age, and other preferences.
4. Return of Premium Option
There are several term plans that provide the “Return of Premium” option, either in-built or in the form of riders that allow you to get back the premiums that you have paid for the policy in case you survive throughout the policy tenure.
With this option, you can accumulate financial resources in the form of premiums that can be used for your retirement or other purposes. This essentially makes these plans similar to standard life insurance policies but with a relatively lower cost.
Best Term Plans Available in India
1. Canara HSBC Oriental Bank of Commerce – iSelect Star Term Plan
The iSelect Star Term plan by Canara HSBC Oriental Bank of Commerce is your financial safeguard against various uncertainties in life. It is an extremely flexible term life insurance plan that allows you to customize your investments as per the requirements and progressions in your life.
With this plan, you can personalize almost every aspect of your investment, from coverage and premium payment terms to the benefit payout modes. It’s a completely tailor-made plan with a variety of unparalleled features like whole life cover, multiple payout options, and many more.
2. Max Life Smart Secure Plus Plan
The Smart Secure Plus plan by Max Life Insurance provides two death benefit covers as per your requirements at very reasonable prices. Moreover, it also offers great flexibility by providing you different payout options as per your family’s requirements.
You can choose from options like lump-sum, monthly income, or even both. There’s even a “Return of Premium” option available that allows you to gain back the premiums you’ve paid in case you survive throughout the policy tenure.
3. Kotak E-Term Plan
The Kotak e-Term is a pure protection plan that has a minimum age requirement of eighteen years. With this plan, you can get a minimum sum assured of Rs. 25 Lakhs and choose from a variety of premium payment options such as monthly, quarterly, half-yearly, and yearly.
Moreover, there are three payout options available with this plan namely immediate payout, increasing recurring payout, and level recurring payout. You can also choose additional riders for your policy to extend its coverage even more.
4. Bajaj Allianz Smart Protect Goal Term Plan
The Smart Protect Goal Term Plan provides an adequate death benefit at very affordable premium rates along with maturity benefits. In case the policyholder gets diagnosed with any critical illness, the plan also provides financial assistance for the same.
A term life insurance policy is an extremely crucial investment to make if you have family members dependent on you financially. Moreover, with the return of the premium option, you can also use these plans for wealth accumulation. There are many promising term plans with several unique features that provide you both life-saving and investment benefits. Therefore, make sure you invest in a term plan as soon as possible to enjoy maximum benefits.