Is It Good To Buy A Term Insurance Plan In 2022?

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Is It Good To Buy A Term Insurance Plan In 2022?

Term Insurance Quote
  • 21st Dec 2021
  • 586

Is It Good To Buy A Term Insurance Plan In 2022?

If you are an earning individual, the financial security of your family members will be of prime concern for you, isn’t it? One of the best ways to give your dependents the financial cushion they deserve is to purchase a term insurance policy. Today as a majority of the reputed insurance companies offer online services, buying a term plan is easy. You can compare the various plans online from different insurers and choose the right plan that perfectly fulfils your insurance needs.

What is Term Insurance?

Term insurance is a type of life insurance policy that offers a death benefit to the family members in the event of the policyholder’s untimely demise during the policy period.

Why must you buy a term plan in 2022

  • Protection against the uncertainties of life

The onset of the COVID-19 pandemic has taught the world an important lesson, i.e., ‘life can be uncertain.’ It is a known fact that the deadly virus has claimed a million lives worldwide. In such a situation, it is only wise to give your family financial protection against such uncertainties to ensure that they do not face any financial stress in your absence.

With the imminent threat of the third wave of infection looming large, if you have not purchased a term insurance policy yet, it is best advised to buy it now in 2022 and secure your family’s financial future.

  • High sum assured and affordable premium

The COVID-19 pandemic-induced lockdown led to the loss of jobs, business closure, pay cuts, etc., which meant people faced several financial issues. In a situation where you have an income shortage, buying an insurance policy would be the last thing on your mind.

But buying a policy has become even more critical in 2022 than ever before. This is where term insurance holds a significant advantage over types of life insurance policies. You can purchase a policy with a high sum assured at an affordable price. There are term plans that start with a premium as low as Rs. 500 per month.

Thus, even if you have an income shortage, you can still afford to buy a term plan and give your family the financial protection they need.

  • Tax Benefits

Apart from the affordable premium and securing your family’s financial future, a term plan is a must-have in 2021 from the tax-saving perspective. The premium you pay for the term plan is eligible for tax benefit under Section 80C of the Indian Income Tax Act.

You can get a deduction of up to Rs. 1,50,000 in a financial year. Additionally, the death benefits your family may receive is entirely tax-free under Section 10(10D) of the IT Act.

If you have purchased health-related coverage like a ccritical illness rider, the premium for the same is eligible for tax deduction under critical illness rider, up to Rs. 25,000.

  • Highly Flexible

Another significant benefit of buying term insurance cover in 2022 is that it offers excellent flexibility in choosing the coverage amount, the policy duration, renewability etc. Based on your specific insurance needs, you can choose the sum assured. For example, if you are facing a cash crunch due to the pandemic, you can purchase a policy with low sum assured, which directly translates to an affordable premium.

Similarly, if you don’t want to renew the policy, stop paying the premium, and the policy will expire automatically. Thus, based on your financial condition, you can buy the policy you need.

  • Final Word

Today, in times of uncertainty, as you need to be financially prudent, do your research well about the various term plans before making the financial decision. But rest assured, a term plan can help you get peace of mind knowing that your family’s financial future is secured.

- A Consumer Education Initiative series by Kotak Life

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