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A pure term insurance plan is a life cover designed to offer financial protection to the insured person's family in the event of the insured’s death. Investing in pure term insurance offers numerous benefits, including financial security at an affordable premium rate.
After the onset of a global pandemic, a myriad of health issues have affected the overall human well-being. This has spurred people to secure their lives and buy life insurance plans to protect their loved ones against any eventualities.
Term insurance is one of the simplest and most affordable life insurance plans that can offer extensive financial coverage, ensuring your loved ones are completely protected. One of the most basic and popular types of term plans is pure term insurance.
This article outlines all about pure term life insurance and why it is important to invest in one.
Pure Term Insurance Plan Meaning
A pure term insurance plan offers life cover to the insured. Upon the death of the insured, an extensive sum assured/death benefit is paid out to the nominee.
These plans are called pure protection term insurance plans as they provide substantial protection at affordable premiums but do not provide any payouts if the insured individual survives the policy term.
Premiums for this type of insurance plan can be paid regularly, including monthly, quarterly, half-yearly, or yearly instalments. The paid premium is eligible for tax benefits* under Section 80C of the Income Tax Act, subject to prevailing tax norms.
Top Reasons to Invest in a Pure Term Insurance Plan
Provides Financial Security
A pure term insurance plan secures the financial requirements of your family in case you are no longer around. It is a plan designed to help your loved ones accomplish critical life goals like education, marriage, health expenses, and so on during unfortunate events.
Convenient and Low-cost Premiums
Among the biggest pure term plan benefits is its availability at affordable premium rates. These plans often come with lucrative cover at low premium costs. The affordability of a pure term insurance plan makes it a preferred choice among many policyholders.
Offers Income Tax Benefits*
The premium paid by a policyholder for pure term life insurance plans is eligible for tax benefits and deductions. Under Section 80C of the Income Tax Act 1961, the premiums paid by the policyholder are tax exempted for up to Rs. 1.5 lakhs in one year.
Availability of a Wide Range of Riders#
You can customise your pure term insurance plan with the addition of riders. For example, one can cover death in case of accidents, using an accidental death rider. The purchase of riders may depend on your choice and current needs.
Flexible-Premium Payment Option
The best pure term insurance plans give freedom to the policyholder to pay the premium in a flexible manner depending on the insurer. You can choose from a range of payment options and pay the premium on a monthly, quarterly, and annual basis.
Wrapping Up
A pure term insurance plan serves the primary purpose of providing maximum financial protection in the event of the insured's passing. Investing in pure term insurance offers financial security at an affordable premium and a wide range of optional riders.
The insurance market is flooded with a plethora of term insurance plans, each offering different features. When selecting a pure term insurance plan, it's advisable to choose an insurer with a proven track record in managing policyholder funds and a good reputation in the market.
Tata AIA Term Life Insurance comes with long-term coverage that protects you and your family for your entire life. For example, the Tata AIA Life Insurance Sampoorna Raksha Supreme plan gives you an in-built benefit option to receive 50% of the basic sum assured in the event of a terminal illness diagnosis.
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