There are several investment options available in the world today that can help you grow your money over the years. With dramatic changes in the global market, commercialisation and globalisation, the investment opportunities have increased.
Today, we have mutual funds, stocks, bonds and many other alternatives in the market to trade and invest in. Apart from it, property and gold remain one of the leading investment items in the Indian Subcontinent. Amongst the two, property remains a hot investment option for a very long time.
And then, out of the blue, a new investment opportunity became popular – term insurance plans..
Insurance plans have existed for centuries now. It was life insurance that was well-liked at first. Term insurance came into the picture, stole the limelight, and has gained critical acclaim for its multiple benefits.
Term insurance- in a nutshell
There are mounting insecurities in life. It is uncertain and prone to surprise accidents. You could be in the prime of your health and still get a sudden heart stroke which has a high mortality rate. Not to mention, road accidents are highly prevalent and a big reason for accidental deaths.
Incidents like these do not warn you and can knock on your door at any time. Your best shot against events like these is to be prepared for it. It would be best if you did not wait for an emergency crisis like this to make amends for it. And that’s where term insurance rushes in to save the day.
With an appropriate term insurance plan, you help your family and yourself; a term insurance plan guarantees a sum assured to your family if anything happens to you.
For instance, you buy a term insurance plan and pay the annual premiums for it. In case, you land in a fatal accident or succumb to a single fatality, your family will be entitled to a specified cover amount. This amount is generally double or even triple the cost of the premiums paid by you.
The amount paid to your family by the insurer will help your family bear their living costs after your demise. Your spouse will be able to pay the EMI of your house, your children will be ready to go to good schools, and your parents will be able to afford their medical care – even after your death.
Also called the death benefit, this money will act as a protective cover against financial harms that could come to your family.
Term insurance = The Best Investment
While there are many investment options and even many more insurance options, term insurance is the best investment bet. Following is a list of the top reasons that make term insurance vital for you and your family.
- Cheapest investment plan
The primary reason why term insurance is the best investment plan is that it’s one of the cheapest investment options out there. At a very nominal premium, term plans offer high coverage. The return on investment with term insurance plans is on the more top end. The sizable financial cover provided by term insurance ensures your family’s happiness and guarantees a good future.
- Affordable premiums
The premiums for term insurance plans compared to other insurances are very affordable. With motor insurance, property insurance, and even health insurance; the premiums are considerably high. However, premiums for term insurance are very less. And when you start early and buy a term plan early on in your life, the premiums will cost you next to nothing.
This makes term insurance a much sought-after investment.
- Tax benefits
Investment items like property and gold have insanely high tax charges. The tax amount charged on gold, especially is skyrocketing. With term insurance, the tables are turned. You are entitled to tax benefits if you buy a term plan.
When you buy a term insurance plan, instead of paying taxes of many kinds, you can avail a tax exemption. The premiums you pay will be exempt from any taxes, making term insurance cheap, affordable and economical.
- The sum assured remains at a constant high
Unlike other investment options whose returns keep on rallying up and down, term insurance guarantees you an assured amount. Unlike prices of gold which keep fluctuating, the sum assured given by a term plan will remain constant.
It means that come what may, a term plan will pay a guaranteed amount to your family in case you die. A guaranteed amount will keep your family safe and secure. Their future will not depend on fluctuating returns.
- The chance of losses is next to zero
It is possible that you buy a piece of land, and due to some factors, its price can get reduced to less than half. Many factors play a role in this and can diminish the amount of your property. The same applies to stocks and even gold prices. In a nutshell, the chances of making losses with these investment options are high.
With term insurance plans, there is almost minimal to no chance of making a loss. In any case, if you lose your life, your family will get the sum assured promised in the policy no matter what. The insurance company has to pay out the promised money.
- Peace of mind
If you buy stocks or bonds or even mutual funds; you have to run around the numbers continually. Every minute of your life is spent tracking the stock or bond you bought. You are continually figuring out if the numbers are higher than the last time or if they have gone down. You cannot decide if you should hold the stock if the numbers have gone down. Consequently, you try to get in touch with subject matter experts to understand the future of your stock.
With term insurance plans, you can have a good night’s sleep, knowing that your money is safe and growing securely. All you need is to get a plan of your choice, and you’re good to go.
- Retirement benefits
You can give a significant boost to your retirement fund with an appropriate term insurance plan. Many term plans have a survival benefit clause. In case you are fit and fine at the end of the term period, you can avail the survival benefit in your policy. In such a case, all the premiums paid by you will be returned to you at the end of the term period. Which means, you saved all the money you spent on a term plan which went unused.
This money can help you give a significant boost to your retirement plans. You can further invest it in other investment plans to grow your wealth.
Term insurance plans offer a multitude of benefits than other conventional investment plans. Conservative investment options provide low returns on investments. Term insurance plans, on the other hand, give your family a financial cover and also give you benefits at the same time. So, what are you waiting for?
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FAQ
Term insurance is a life insurance plan that provides financial protection to your family by paying a sum assured in case of your demise during the policy term. You pay annual premiums, and the insurer guarantees a payout if needed.
Term insurance is affordable, provides high coverage, offers tax benefits, and guarantees a fixed sum assured, making it a reliable and cost-effective investment.
Term insurance premiums are tax-deductible under applicable tax laws, reducing the overall cost and making it an attractive financial option.
Yes, many term insurance plans offer a survival benefit clause, where all premiums paid are returned to you at the end of the policy term, providing funds for retirement.
