One thing that the COVID-19 pandemic has taught us is that life is full of uncertainties. You can never predict what the future has in store for you. It can take less than a second for the unforeseen to happen. And to protect your family members from such uncertainties, you must purchase a life insurance policy.
 

A life insurance policy provides a financial safety net to your loved ones against your unfortunate death. It ensures that your dependents can continue to live peacefully even if you’re not there to support them in the future.
 

There are two types of life insurance policies available in India – endowment life insurance policy and term life insurance policy. While endowment policies offer maturity benefits to policyholders if they survive the policy term, term insurance plans are pure protection plans with no survival benefits.
 

This is the reason why many people remain sceptical about buying a term insurance policy. In this article, we help you understand term life insurance and its benefits so that you can make an informed decision. We will also tell you is term insurance good to buy in 2023 or not. Let’s get started.
 

What is a Term Life Insurance Plan?
 

Term insurance is the simplest and most affordable form of life insurance. It is a pure protection plan that ensures death benefits if the policyholder is no more. In the case of the unfortunate death of the policyholder during the policy term, a term plan provides a pre-determined lump sum to their nominee(s).
 

Buying a term insurance policy is imperative in today’s times to ensure the financial security of your loved ones. In case of your unfortunate demise, it will take care of your family’s financial needs.
 

Should You Buy a Term Plan in 2023?

The importance of having a term insurance policy increases with every passing year and 2023 is no different.  With increasing uncertainties, it has become necessary to ensure a comfortable future for your loved ones in case of an unfortunate event. And if you are planning to buy a term life insurance policy, the beginning of the new year 2023 can be a great time to get term insurance coverage for your family.
 

Let’s look at some benefits of a term insurance policy that make it a good buy:
 

• Easy to understand

  
  Understanding term life insurance doesn’t take much effort. It is the simplest form of life insurance. It is essentially a pure protection plan that provides only the death benefits in case the policyholder is no more. If the policyholder dies during the policy term, the nominee is provided with a pre-determined sum assured. Term insurance benefits are not affected by any other external variables.

  
  However, if the policyholder outlives the policy term, no survival benefits are provided. Thus, term life insurance policies entail simple underwritings and protect the financial future of your loved ones without any hidden conditions.




• Suitable sum assured

  
  By buying a term insurance plan, you can get a life insurance cover of a suitable sum assured. Insurance companies allow you to choose the sum assured of your term plan as per your requirements and charge the premiums accordingly.

  
  For example,you can buy a term insurance policy of up to ₹1 crore sum assured as per your family’s requirements. While choosing the sum assured of your term insurance policy, you must consider several factors, such as the number of dependents on you, your annual income, and your age. Ideally, you should opt for a term plan sum assured of around 10 times your annual income. However, given how we have witnessed the worst of the pandemic in the last few years, you can also opt for more term insurance coverage, if needed.




• Affordable premiums

  
  Since term plans are pure protection plans, they are very affordable. Term plans are the apt form of life insurance. The insurers are not required to provide maturity benefits to the policyholder, and hence, they charge premiums only to cover the risk of their unfortunate death during the policy term.

  
  Generally, you can buy a term insurance policy of ₹1 crore by paying only an affordable month. However, term insurance premiums depend on several factors, including the policyholder’s age, sum assured, lifestyle habits, and medical test reports. You can contact your life insurance provider to know the exact premium for your term insurance policy.




• Income tax^* benefits

  
  The Government of India encourages its citizens to secure the future of their families. That is why it offers certain income tax^* benefits on buying a term insurance policy. Under Section 80C of the Income Tax^* Act of 1961, you can claim tax exemptions of up to ₹1.5 Lakh against the payment of your term insurance premiums.

  
  Apart from this, you can also get an additional tax^* benefit of up to ₹25,000 under section 80D by attaching a critical illness rider^# with your term life insurance policy. Hence, a term plan can not only help you secure your family’s financial future but also allows you to reduce your income tax^* outgo.




• Whole life cover

  
  With specific term life insurance policies, you can get a whole life cover, i.e., coverage for your lifetime. Usually, life insurance companies provide coverage till the age of 99 years with whole life term insurance plans.

Conclusion
 

As you can see, the benefits of term insurance are plenty. If you’re the sole breadwinner of your family, you must buy a term life insurance policy to ensure that your family members can sustain financially if you are not there with them in the future.
 

However, before buying a term insurance policy, you should analyze plans from insurers and opt for the most suitable one. You can look at the premium amount, maximum sum assured, policy tenure, and the claim settlement ratio² of the insurer. You should evaluate your requirements carefully and choose a sum assured accordingly.

L&C/Advt/2023/Jan/0300