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Why Renewal of Term Insurance Plan is Important

Why Renewal of Term Insurance Plan is Important
  • 8th Jul 2019 |
  • 2,472

There is no amount of certainty in our lives. From childhood, we learn to protect our loved ones. However, the methods that we implement to protect our loved ones change with time. Today, the best way to safeguard the future of your family is to avail of a term insurance plan. The policy offers financial security to the nominee of the policy in case of death of the insured. All you have to do is make regular premium payment and provide for the financial safety of your loved ones.

Why is it important to renew a term insurance plan?

The importance of term life insurance renewal can never be exaggerated enough. If you own a term plan and suffer a major illness just before the expiry of the policy, you will not be able to buy a fresh policy. When you renew term life insurance, you get a chance to extend the coverage because the company cannot refuse the renewal of the plan if the original policy had the option of policy renewal.

There is no medical test required for renewal. This indicates that your health history does not matter during the renewal of the policy. When there is an option of renewal in the policy, the insurance company will renew it without any additional requirements. The only requirement for term life insurance renewal is that the policyholder should be in the appropriate age bracket. Those with a consistent premium payment and an insurance cover, which has not lapsed yet, can renew the policy with ease and convenience. Here are a few reasons why you should renew term insurance.

1. To achieve the main purpose of insurance

If you fail to renew the policy on time, the coverage of your policy will lapse and if any eventually occurs during this period, then your beneficiary will not be able to receive the stipulated sum assured if an unfortunate event takes place. The purpose of the term plan is to secure the future of your loved ones in your absence. In order to achieve the same, you need to pay the premium on time and renew the policy.

2. To claim tax benefits

With an insurance policy, you not only provide for the financial security of your loved ones but also manage to save tax. Term insurance can act as an ideal investment. It is a saving tool to reach your financial goals. When you pay the premium on your policy, you can enjoy tax benefits under Section 80C. If you do fail to pay the premium, the policy will lapse and you will not be able to avail of tax benefit.

Having a term insurance plan is essential. No matter your age or your profession, it is important to invest in term insurance online to meet your financial requirements. Not all plans offer the option of a renewal, which is why you need to verify this option when you purchase a policy. You must make sure to buy a term insurance plan, which offers the option of renewal. Always remember to renew the policy on time to get the maximum benefit from the same. Timely renewal of the policy will ensure that you are covered at all times without any worries.

- A Consumer Education Initiative series by Kotak Life

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