1. What is Term Insurance?Term insurance is a type of life cover, which offer coverage for a pre-defined period or term. If the policyholder expires during this period, the nominee of the policy will receive the death benefit. No benefit will be paid to the policyholder if he/she survives the policy term. However, many term plans come with guaranteed renewal feature, which allows the policyholders to extend the policy term.
2. What is the Eligibility Criteria for Term Insurance?Term insurance plans have minimum eligibility requirements. Most plans are available for people between the age of 18 to 65 years with the maximum maturity age being up to 85 years. The policy term can be from 5 years to 50 years and the sum assured can be from Rs. 20 lakhs to up to Rs. 1 crore and even higher.
3. Do Term Plans Have Riders?Yes, many insurance providers now offer riders or add-ons with term plans. Some of the most popular riders are Accidental Death and Disability, Critical Illness, Surgical Care, and Hospital Car. While the riders do increase the premium nominally, they can considerably enhance the policy coverage to offer added protection.
4. Are Term Insurance Premiums Eligible for Tax Deductions?Yes, under Section 80C of the IT Act, premiums paid towards a term insurance plan are eligible for tax deductions of up to Rs. 1.5 lakhs in a financial year. You can get this tax deduction not just when you pay the insurance premiums for yourself but also for your spouse or children.
However, make sure that you don't pick term insurance as a last-minute tax-saving investment. Calculate your insurance needs carefully and select a coverage amount that you feel should be adequate for your family to manage their expenses for a considerable duration in case of your demise.
Secure Your Family with a Term InsuranceThe low premiums and larger coverage make term insurance plans a must for everyone, especially if you are the sole breadwinner of the family. Go through the policy details carefully before selecting to make sure that you pick a policy that perfectly meets your requirements.
Learn more about different Online Term Insurance Plans here.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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