Five Important Benefits of Buying Term Life Insurance
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- Опубліковано 21 лип 2024
- Having a term insurance plan is one of the most important financial decisions that you can make. It secures your family's future and enables you to reduce the taxes you pay.
In this video, we will look at the many benefits of term insurance & tell you some tips on how to get the most out of the money you spend to get this cover.
To buy term insurance plan from top insurers without any paperwork, download the ETMONEY app, etmoney.onelink.me/unJQ/b8aebfc4
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Benefit 1 - Term Insurance is one of the most affordable forms of insurance out there
To put that into perspective, we pay about 2% of our car’s present value as its premium.
In comparison, term insurance plans are available at as low as 0.1% of the sum assured.
That’s 20 times cheaper than our car insurance premium
Not only is term insurance the least expensive insurance out there but to add a cherry on top of the cake, most insurance companies on online platforms like ETMONEY offer an extra discount on your term insurance premiums as compared to offline channels. Do make sure you take advantage of this and further lower your term insurance premiums.
Benefit 2 - Term Insurance plans offer a much much higher coverage as compared to traditional or ULIP plans In traditional or unit-linked plans, the coverage offered is generally 7 to 10 times the premium you pay.
If you pay a yearly premium of 20,000 rupees - you can expect about 2 lakhs rupees of sum assured. 2 lakhs of sum assured is too low a coverage and might cover only 3 to 5 months of your family’s expenses
On the other hand, term insurance plans offer much higher sum assured so that you can leave your family & dependents with enough money so that they don’t go through financial hardships in your absence.
Let’s put some numbers behind it.
On ETMONEY, the average sum assured of a term insurance policy is a little over 1 crore rupees which comes to an average premium of 17,000 rupees. This 1 crore sum assured is about 60 times of the sum assured I would have received in a regular traditional, moneyback, endowment or ULIP plan Net net, term insurance plans offers high life insurance coverage at very low premiums
Benefit 3 - Term insurance plans are super simple to understand. Simplicity is one of the reasons for the growing popularity of term insurance plans. Term insurance plans are pure life covers that focus on offering your dependents the contracted sum assured in case you were to die. You simply need to ensure that you have been paying the premium promptly.
Benefit 4 - Term insurance plans offer immense tax benefits
There are three types of tax benefits that term insurance plans offer
1. Benefits under Section 80C allows an exemption for life insurance premiums of upto 1.5 lakh per annum.
2. Benefits under Section 10 (10D) which pertains to the death or maturity benefits that are payable under the policy. This section directs all insurance benefits payable to be fully exempt from taxes which means your beneficiaries will get the entire coverage upon your death and no taxes will be deducted
3. Benefits under Section 80D which allows an exemption to that part of the premium that is paid for health-related coverages like critical illness riders which can be added with a term insurance plan.
Remember, tax laws change often so it is wise to be on top of this and consult your tax advisor for greater details
Benefit 5 - The premiums of term insurance plans are locked for the duration of the plan
It is surprising how many consumers don’t know this but when you purchase a term insurance plan, you are effectively locking the premium that you will be paying this year, the next year and every other year until the end of the term plan.
And this is where it becomes highly beneficial and smart of you to start your term insurance plan as soon as possible when the premiums are lower for younger ages.
Let’s do some math.
If one were to take a 1 crore term plan at the age of 30 years, the premium would come to approximately Rs.10,000 for a plan that provides coverage until 75 years of age. This means you’re paying 10,000 rupees every year for the next 45 years, totaling to 4.5 lakh rupees.
Let’s say, one were to procrastinate and decide to enrol for a term plan much later - say at the age of 45 years. At this age, the annual premium is going to be much higher at about Rs. 30,000 per year which means paying 30,000 rupees every year for the next 30 years which totals to 9 lakh rupees.
So figure this -
When enrolled to the plan at 30 years, one would have been covered for 45 years and the total premium outlay will be 4.5 lakhs
But you procrastinated And when you enrolled at age 45, you would have been covered for just 30 years but would have paid double the amount of premium in those 30 years at 9 lakhs rupees as compared to 4.5 lakhs if the plan was taken at the earlier age of 30.
Be smart about term plans and don’t wait any longer to enroll for one.
good, simple, clear explanation
simple and clear explanation, like the background music as well :)
Glad you liked it! Thanks
Very good information...
Too good explanation.
sir I bought Bajaj Allianz smart protect plan..is it a good insurance?
@ETMONEY
Thank you for your education on our finance, if these numbers and the tax section are correct, can you help me to fix
them?
1.5L(ELLS+LIC+PF)----80C
50K(NPS)----80CCD (1b)
6K(Health Insurance)----80D
6K(Term Insurance )----80D
Is accident death covered under term insurance without rider or add on ?
Brilliant....
I have gone through all top three Term Insurance plan ET Money recommend but i am unable to find "ACT OF GOD" clause anywhere, can you make a video on things which are not cover in Term Insurance or at least if you can clarify it for users so that we are aware about this.
Hi sir,
If anything happens to me, term insurance provide sum amount to my family...
If nothing happens to me, can I get my paid amount back?
Simple and crystal clear explanation.
Awesome
Great video
Glad you enjoyed it
You have only told about benefits, but what will be the maturity which covered by TI plan. Does maturity value apply only in case of death or even after completing premium of TI. Please do reply..
If whatever he said is correct, I think 4.5 lakh only, and you will be assured that your children will complete their education and everything if you die before 75 otherwise, you lived a good life. What are the cons here? That you lived till the age of 75?
No sarcasm intended only telling you that it's a win-win situation, but yes, if you have 2 term plans, one in which you get the maturity value and other in which you do not, then you can surely go for the first one.
Very good information
Thanks
सरजी , मै 15 लाख रु सिंगल प्रीमियम मे लगाना चाहता हूँ कृपया बताइऐ कौन सा प्लान सुरक्षित, अधिक लाभ प्रदान करता है।
Can we obtain 2 different term insurance plans? Say for example, I opted for 1cr term insurance now and after 5 years, can I opt for 1cr with a different plan with the existing one being continued?
Yes you can
Yes
Good I'm Going to Buy
If u need any assistance for term plan send me a mail to surajakolia1998@gmail.com
Brilliant
Thx
Might be a stupid question...but what happens if I have taken Term Insurance Cover till age 70 for example but I do not die at age 70?
You will not get any amount unless you have paid for an add on money back policy along with your term insurance
@@aadhithanradhakrishnan6166 thx 👍🏻
What about the maturity ammount if u don't die
There is no maturity amount in term insurance. Term insurance is a protection plan and not an investment plan. That's why it gives 1 crore of cover at such low premiums.
First comment
If a person is not going to get married ever in life and his parents are financially independent then does this make any sense in buying any term insurance or life insurance policy? Will health insurance be enough for that person?
Make a video in hindi you are a hindustani iam a right
Hi P.D. Joshi,
Thank you for your suggestion. As you might have noticed, we have videos in both Hindi and English on our channel. We will be adding more languages as well.
Regards,
Team ETMONEY
@@ETMONEY thanks for accepting my suggestion and reply me good filling sir
झूठे income proof (salary slip और salary वाले खाते की स्टेटमेंट ) के आधार पर कराई गई policy का प्रीमियम भरते हुए 5 साल हो गए । अनहोनी होने पर क्लेम मिलेगा या reject होगा
Reject
Sir this india tem life insurance is for india people not for england / American please give nice Speach in hindi So over all india people Can Cnow about term life insurance.
Please try to make a hindi videos
Double premium for smokers comparing to non smokers is not happy thing.
Iam a pure a indian
I cannot speak a English
Please make video hindi language
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