Term Insurance, since their origin, are mainly known for being the simplest form of insurance. Its primary purpose is to offer pure protection. Do you know what it means? Well, it offers you simply a death benefit or coverage benefit. Nevertheless, the times have changed.
Nowadays, many new ways to save have surfaced that can help you tap on unique term insurance benefits. While you may invest in a basic term plan with certain key tips and tricks, expect to enjoy good returns.
Let’s look at the ways to expand the benefits of your term plans.
Understanding the True Power of Term Insurance Plans
For years, financial planning has often been linked with term plan investments. Do you know why? They are simple insurance schemes offering coverage benefits in case of an unfortunate event. This is offered in exchange for budget-friendly premium payments for a fixed term, hence justifying their name also, term insurance. In fact, these plans are great when it comes to providing a financial security net for your loved ones.
Nevertheless, term plans indeed offer financial security, but only a few are aware of their other benefits.
Key Tips to Expand Your Basic Term Insurance Plan
Earlier, the term plans were simple and straightforward, but as the market is expanding, many insurers now offer customisations. Here’s how you can maximise the value of your term insurance policy:
1. Customisation
Today, many insurers offer customisable options to meet your specific needs and financial goals. Here are a few areas where you get the flexibility to choose from a range:
- Coverage Amount: Choose the suitable sum assured based on your dependents’ financial needs and outstanding liabilities. Here, you may leverage an insurance calculator to find out an optimal coverage amount.
- Policy Term: Explore and go for a term policy that aligns with your financial obligations and future goals. For example, take into account the duration of any pending mortgages that you have or the time frame required to fund your children’s education.
- Premium Payment Options: Present-day insurance providers also bring the option of choosing flexible payment methods to your table. When you’re investing with them, you can choose a suitable structure like monthly, quarterly, or annually.
2. Enhancing Insurance Protection
Term plans are subject to improvisations. You can add rider benefits to it, which would be included in your existing base-term insurance plan. They offer additional benefits with a nominal increase in premium. Here are a few rider benefits to consider:
- Accidental Death Benefit Rider
- Critical Illness Rider
- Waiver of Premium Rider
- Income Benefit Rider
3. Be Smart With the Taxes
Often overlooked, tax is the trap most fall for. Nevertheless, with sound knowledge of different sections under the Income Tax Act 1961, you can leverage them. Some of the sections that offer tax deductions are as follows:
- Section 80C
- Section 10(10D)
- Section 80D
4. Reviewing and Updating Your Policy
Your financial situation is subject to change, and it is essential to acknowledge this fact. Sometimes, your goals may even change, which makes it a must to review your policy now and then. Regularly reviewing your term insurance policy ensures your coverage remains adequate.
Consider factors like changes in your income, dependents’ needs, or future financial goals. Based on your review, you might need to adjust your coverage amount and policy term or add riders to better address your changing needs.
5. Opt for a Reliable Insurance Company
Expanding your term insurance plan does not necessarily mean adding rider benefits or claiming tax deductions. The decision to choose a reliable insurance company heavily impacts the benefits you’re going to reap from your plan. You should opt for a plan with a good claim settlement ratio.
Ready to Maximise Your Term Plan Benefits?
Expanding your base plan becomes easy if you know what term insurance is and its ins and outs. While considering the rider add-ons, tax benefits, and flexibility options, remember to select a reliable insurance-providing company, Canara HSBC Life Insurance.
Their online insurance plan range includes a variety that extends from basic life insurance plans to market-linked plans. For example, Young Term Plan, iSelect Smart360 Term Plan, and Invest 4G, etc.
Simply visit their official website, explore the right option with all the customisations you’d like, and get insured today!