Term insurance: Smart choice for financially secured individuals

Term insurance is one of the smartest options to secure the financial interests of you and your family. Any financial planning is incomplete without a fall-back option for your family members in case of an unfortunate event, such as demise. Hence a smart financial plan isn’t just about saving for the future but should also protect your family from any emergency.

Let us explore why term insurance is a smart choice worth considering. 

Why is purchasing term insurance a smart choice to financially secure your future? 

A smart financial plan should protect your family and promote savings at an affordable cost so that you can maintain your purchasing power even in the future. Term insurance is a smart choice as it helps you achieve all these four facets. Here’s how:

1. It guarantees financial protection for your loved ones, protects your assets and offers peace of mind

The most essential aspect of a smart financial plan is protection and term insurance play an indispensable role in your family’s financial protection. Term insurance offers regular or lump sum payouts to help your family cover their expenses after an unfortunate event. These guaranteed payouts help them maintain their lifestyle and meet essential financial needs. 

Term insurance payout support your family members financially to continue with their lives by offering them sufficient funds, so they do not have to make difficult financial choices.

Term insurance ensures your peace of mind with guaranteed and assured payments, so you know nothing can go wrong to your family in your absence. It allows you to plan, knowing that no matter what happens, your loved ones will have a financial safety net to rely on. 

In addition to death benefit, term insurance plan also offers add-ons that can add value. For example, critical illness rider is one such add-on that will help you deal with the medical expenses if diagnosed with any critical illness covered by the insurance provider.

2. It offers affordability and helps you manage multiple financial priorities together  

A smart financial decision is one that fits within your budget while securing your family’s future. Affordability ensures that you can sustain your financial commitments over the long term. If a plan requires you to spend too much today, it may be difficult for you to manage your other expenses. This is why affordability is essential, as it allows you to protect your future without sacrificing your present financial stability. 

Term insurance is designed with affordability in mind. The premiums for term insurance plans are significantly lower compared to other life insurance options and would remain same throughout the policy term, which makes it easier to maintain coverage for a longer period. You do not have to cut out other essentials from your budget to accommodate insurance for your family. Moreover, since the cost is manageable, you are less likely to discontinue the policy due to financial shortfalls.

There are also ways to make term insurance even more affordable. For example, purchasing a term policy at a younger age helps you get a lower premium. Additionally, maintaining a healthy lifestyle can also reduce the premium, as insurance providers offer better rates to individuals with lower health risks. 

3. It enhances your savings in multiple ways

Term insurance enhances your savings, too. Since the premiums are affordable, you can allocate more money towards other financial goals, such as planning for retirement, covering your child’s expenditure or buying a home. The money that you save on premiums can be used to achieve these essential expenses and more.

Savings also contribute to better financial flexibility by increasing your liquid capital. Having extra funds allows you to cover your planned and unexpected expenses. It also improves your overall quality of life. 

Additionally, term insurance offers tax benefits, which further boost your savings. Under Section 80C of The Income Tax Act, 1961, you can claim a deduction of up to ₹ 1.5 lakh per annum on term insurance premiums. If you opt for a critical illness rider under a term plan, it is considered a health insurance component for tax purposes. This allows you to claim an additional deduction of up to ₹ 1 lakh under Section 80D for premiums paid for yourself, your spouse, children and parents. These tax benefits help you save even more while ensuring financial protection for your family.

4. It offers inflation protection with high coverage values

A smart financial plan accounts for rising costs in the future. Term insurance provides high sum assured options that factor in inflation to ensure your loved ones' future needs are covered. For example, a sum assured of ₹ 1 crore can help offset inflation while securing your family’s financial well-being. 

The best part is that you can purchase such a high amount at an affordable premium without burning a hole in your pocket. Few term insurance plans also provide an increasing monthly pay out to your family members. The payout will increase by a certain percentage every month sufficient to deal with the inflation.

To sum it up

Term insurance is indeed a smart choice for securing your financial future. It protects you, your assets and loved ones against unforeseen situations. It also accounts for inflation, enhances your savings and offers affordability. Integrating it into your financial plan can help you ensure long-term security for yourself and your loved ones. 

So, do not wait anymore. Make the smart choice today, check the premiums using online term insurance calculator and invest in a term insurance plan.