Anyone with financial dependents must purchase a term insurance policy. This includes married couples, parents, entrepreneurs and freelancers, sip investors, young professionals with dependent parents, and in some cases even retirees.
Life insurance premiums paid are deductible from the tax base according to section 80c^^ and, therefore, carry a double benefit for taxpayers: protection and tax savings. the amount (maturity value) received under a term insurance policy is also exempt from tax subject to the conditions of section 10(10d)^^ of the income tax act of 1961^^. term insurance also has the lowest premiums compared to the different types of insurance policies.
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Therefore, people who get any of the three significant benefits associated with term insurance should consider purchasing such policies. the three significant benefits are: life protection, tax savings and affordable premiums.
- Parents: Parents are often the only source of financial support for their children. Children’s needs range from school fees and living expenses to hefty college fees later in life. an unfortunate event with one of the parents can jeopardize their future and deprive children of life opportunities. Parents should make sure this scenario doesn’t happen by purchasing a term insurance policy. this policy will pay a lump sum and/or income to meet the expenses of your children, in case of any mishap of the parents.
- Newlywed Couple: Roses, chocolates, and movie tickets are great, but here’s a truly lasting gift for your spouse: term insurance. this gift will give your spouse more than a momentary joy and will secure his or her future. term insurance assures the spouse financial support in the event of a mishap with the insured person and should be purchased as soon as possible by married couples.
- Working Women: Women today are on an equal footing with men, whether managing their finances or providing for their family. Today, a family depends as much on the woman’s income as on the man’s. This dependency brings with it the need to financially insure your loved ones in case something happens to you. A term insurance plan ensures that your parents/spouse/children are financially insured even in your absence. ensures that your family does not have to compromise on your lifestyle and can continue with the goals you set for them. The term insurance coverage amount also helps cover any outstanding liabilities, such as home loans, car loans, education loans, and more. Not only this, but some term insurance plans also come with the added benefit of critical illness coverage that provides a payout if you are diagnosed with a serious illness like breast or cervical cancer.
- Young Professionals: Young professionals are just beginning their careers. many of them are not yet married and have no financial dependents. however, this is likely to change in the future when they marry or support their parents or relatives. Those people should buy term insurance now instead of waiting. This is because once a policy is purchased, the premiums stay the same throughout a person’s life. On the other hand, waiting to purchase term insurance in the future can force customers to pay higher premiums because term insurance premiums increase with age.
- Taxpayers: Temporary insurance premiums paid are allowed as a deduction from taxable income under section 80c^^ of the Income Tax Act of 1961^^. term insurance payments at maturity are also exempt from tax subject to the conditions of section 10(10d)^^. therefore, taxpayers can use term insurance to significantly reduce their tax burden.
- Self-Employed: As a self-employed person, you face many challenges. Unlike salaried people, you do not earn a fixed monthly income; you have an uneven source of income that depends on the ups and downs of the market. In addition, you may have also taken a business or personal loan from creditors, banks, or even from your family and friends. therefore, purchasing a term insurance plan to protect your family becomes even more important to you. A term life insurance policy can ensure that your family remains financially secure even in your absence.
- SIP Investors: Investors in SIPs (Systematic Investment Plan) mutual funds invest a fixed amount each month in a mutual fund. Sip wealth creation is fueled by a stream of regular installments that accumulate over time. however, an unfortunate investor event can stop the flow of installments. Term insurance can protect the sip by providing the insured person’s nominees with funds to continue the sip.
- Retired: Retired people are required to have term insurance if they have dependent spouses or families. Purchasing term life insurance can also be a way to leave an inheritance for your families. This is because term insurance is paid to nominees in the event of any mishap with the insured person. the term insurance payment is also tax-free subject to the conditions of section 10(10d)^^ of the Income Tax Act of 1961^^.