A term insurance is one the best way to protect your family from the uncertainties of life. It ensures your loved ones continue to live a life of comfort even in the most turbulent of times. You get great coverage amounts for reasonably less premium payment amounts. But, there are a few ways you can get even more from your term insurance plan. This article will discuss 3 ways to do so.
A term insurance planallows you to save on taxes. In fact you can save just as much as you pay towards the plan. This is because, under section 80C of the Indian Income Tax Act, 1961, you can use the premium amount to avail tax deductions up to Rs. 1, 50,000. This benefit is available to you every year until the plan comes to an end. Therefore, if you annualized premium is Rs. 15,000 and your plan is for 30 years, you can save up to Rs. 4, 50,000 over the tenure of the plan.
Health complications are always a liability. They can happen to anyone at any time and they often threaten to put families in emotion and financial turmoil. This is because, healthcare costs are going through the roof and the road to recovery is always one filled with expenses. However, if you opt for a critical illness rider along with your term plan, you can get financial cover for a list of common life threatening conditions such as cancer, heart-attack, stroke, multiple sclerosis, etc.
If, God forbid, you are affected by such conditions, your critical illness rider can be very useful to foot the bills. Some companies also offer to waive of further premium in case these conditions lead to permanent disability.If you do not suffer such diseases, you can still use this rider to your advantage as it allows you tax benefits on its own. Under section 80D of the Indian Income Tax Act, you can save a further Rs. 25,000 per year. If you are senior citizen this amount is increased to Rs. 30,000.
Just like other traditional insurance plans such a health insurance or property insurance, there is a payout only in case of a dire event that’s covered under the plan. With these types of insurance there is no payout at the end of the policy term. This is the case of a term insurance plan too! However, if you add the return of premium rider to your plan, you can avail a payout at the end of the tenure.
These were just three simple ways to put your term plan to better use. These steps add more utility to your term insurance to ensure that you get more value for your money. If you are thinking about going in for term insurance then talk to a financial expert about using these tips.