The Relief of a Term Plan


Whenever someone from the family starts to earn and position himself as the sole or one of the bread earners for the family, he becomes a valuable asset to the family. Obviously, his responsibilities increase, mostly, financially. Securing that for a long term purpose, in unfortunate times, is a term plan.

One of the most basic life insurance plans in the market these days is Term Plan. Purely based on the concept of insurance, term plan can cover anybody as per their choice, without creating any financial burden or reducing the value of money invested.



While Endowment and ULIP plans might have a high premium, term plan is quite affordable, making it one kind of universal, in terms of affordability.

How does a term plan work?

A person seeking to get insured under a standard term plan, decides the sum assured and its premium, via help of a insurance agent or insurance company itself. Critical aspects deciding the insurance amount and premium are a person’s age (which retrieves HLV), his annual income and his ease of paying the premium.  On these criteria, the term plan’s tenure and its premium are decided.

A term plan can be redeemed only in the unfortunate event of demise of the insured (aka death benefit) and there are no maturity benefits. However, thanks to the IRDAI, there can be several add-ons (riders) to a term plan that facilitate financial assistance to someone when needed.

As far tax exemption is considered, term plan insurance does count for exemption under 80 (C) of the Indian Tax Act, making it even more reasonable to buy a term plan. On the other hand, the amount given to beneficiaries is also tax free under section 10 (10D) of the IT Act, 1961.

When comes to protecting our loved ones with sudden unfortunate events, term plan is one of the best financial security insurance available. However, with no maturity benefit, people to tend to seek for other options that brings money back into their bank in the case the insured survives during the policy term period.

Thanks to era of privatisation, several life insurance companies have popped up recently and aggressively offer and sell their plans 24X7, via internet, agents, banks etc. The insurance seeker can now choose from several term plans that are distinguishable in terms of the premium, the add-ons, amount insured and other features over the basic plan.

We have entered in an era of high end healthcare which is becoming more and more economic each day. Life Expectancy is on a constant rise since decades and so is the standard of living of people.  Keeping your family safe, without spending a lot of money is one of the few wise options available, which is what a term plan does. If you haven’t yet subscribed to one, subscribe one or search over the internet to find the best plan.

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