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Sound financial planning involves buying life insurance. Your family depends on you for their protection and wellbeing. In case of an unfortunate event, your life insurance policy can safeguard your loved ones against financial difficulties.
Also, a cashback insurance policy provides the resources for your future financial stability.
Hence, life insurance is one of the essential financial tools to include in your portfolio. Here's a rundown on how this product secures your financial future.
1. Serves as an income replacement
Your income sustains your family’s livelihood and future aspirations like career goals. In case of an unwanted event, they lose that financial support. So, as the principal wage earner, you need to arrange for alternate resources for your family's present and future expenses.
Life insurance is a legal contract in which you pledge to pay a predefined premium. In return, the insurer assures a specified payment to your family members in case of an eventuality. Thus, it can replace the lost income.
2. Reprieve from debts
You may have outstanding dues such as a mortgage on your home or credit card bills. In the event of your demise, your family will have to shoulder the EMI burden. They can use the payout from your life insurance to repay such loans, keeping their savings secure.
3. Covers children's education costs
Children's future security is every parent's primary concern. But your absence can affect your children's education and career prospects. Fortunately, your life insurance can fund their schooling costs and life's milestone events, such as marriage or starting a business.
4. Builds funds for long-term life goals
Life insurance policies offering savings opportunities help you create wealth. The maturity proceeds can fund your investment goals, such as buying property or amassing retirement corpus. Even pure protection term insurance that gives money back provides a nest egg at the end of the policy period. You can use it to buy an annuity as an alternative income or invest in various avenues to earn profits.
5. Reduces your income tax1 outgo
When you start earning, you become liable to pay income tax1. Without proper planning, the payable tax1 amount can be a burden.
Life insurance premiums are eligible for deductions from your taxable income1 under Section 80C of the Income Tax Act, 1961. Thus, it can lower your taxes1, allowing better use of your finances.
6. Acts as a safety net against unpredictable events
Most insurers provide add-on benefits, called riders#, at nominal extra costs along with your base life cover.
An accidental death benefit provides extra payouts to your family in case of a fatal accident. A critical illness rider# gives you a lump-sum payout on the diagnosis of life-threatening health conditions covered under the plan. You can use the money to access quality healthcare.
Thus, life insurance helps you stay prepared for various unforeseen circumstances.
For effective defence against contingencies, you need to choose enough coverage to meet your family's current and future financial needs. Also, the premium for the required life cover should suit your budget. Failure to pay the premium will void the insurance cover.
A term insurance plan attends to all these parameters. Offering life cover at affordable premiums, it can provide sufficient financial protection to your family in your absence. However, to ensure the plan matches your family's needs, you should consider the following factors:
If you survive the policy term, you do not get any maturity amount from traditional term plans.
But Tata AIA recognizes investors need to get returns on their money. Hence, it offers term insurance with money back option. At maturity, such plans return the total premium paid if no regrettable event occurs during the policy term.
Thus, such term plans not only secure your loved one's future but also satisfy your financial needs. You can use the returned premiums to generate an income or to fund big-ticket expenses. Besides, knowing your money will not go to waste provides mental peace.
Tata AIA offers the following term life insurance plans under their Protection Plans segment*:
Moreover, the beneficial features of all the products include:
Thus, these term plans ensure financial protection against various economic challenges.
Even if you buy investment-linked insurance products, you should not miss out on the competitive advantage of term plans. Compare plans and select the best term insurance with maturity benefit for all-round protection against financial troubles.
By submitting your details, you are giving your consent to receive SMS/Call by Tata AIA Life Insurance Company Limited or its representative, with reference to this solicited inquiry even though you may be registered on the DND list. L&C/Advt/2019/Jan/075
1Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you
#Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch.