Term insurance is a feasible form of life insurance policy that is available for affordable rates of premium. Term insurance plans come in many forms with varying coverage. You can choose plans that best fit your needs and the amount of coverage that will suffice for your loved ones in the event of your demise.
Types of Term Insurance
There are several term insurance policies that provide varying benefits. Here are the types of term insurance to consider:
- Increasing term plan –
It is a type of term insurance policy wherein the sum assured increases every year. During the conception of the policy, you can choose your sum assured, policy tenure, and riders. The longer you survive the policy tenure, the more your sum assured grows. It is an excellent policy to tackle the effects of inflation as well as secure your family’s future. - Decreasing term plan –
It is a type of term insurance wherein the sum assured decreases every year. The insurance provider deducts a specified amount annually, which is used to repay your loans and debts. In the event of your death, the settlement may be lower but the liabilities are also negligible. Therefore, your loved ones can use the death benefit to plan their future finances without stress. - Level term plan –
It is a type of term plan wherein every element of your policy remains the same throughout the tenure. - Single premium term plan –
This term plan allows you to purchase your policy with a single premium payment. All the benefits of the plan are locked in but you don’t have to worry about paying premiums monthly or annually.
Based on your requirements, financial planning, and benefits, you can choose the term insurance plan that most appeals to you.
Term insurance eligibility criteria
Term insurance is a very affordable plan. That is why, insurance providers insist that applicants must meet the term insurance eligibility criteria to enjoy the complete benefits of their policy. Here are the term insurance eligibility criteria that you need to know:
- You must be an Indian citizen, even if you live abroad.
- You must undergo a medical checkup to illuminate your health conditions.
- You must honestly disclose if you are a smoker.
- You must submit the necessary documentation to successfully apply for a term insurance plan.
These term insurance eligibility criteria are quite simple. When you furnish the details of your health and lifestyle from the start to meet the term insurance eligibility criteria, it makes it easier to file your claims with no discrepancies.
Is 75 lakhs term insurance enough coverage?
The sum assured, i.e., the amount of coverage required for your family or loved ones depends on their lifestyle and financial needs. You will have to evaluate the immediate financial requirements and weigh them against long-term plans.
For an average family, a 75 lakhs term insurance plan may be sufficient. A 75 lakhs term insurance entails that in the event of your demise, your beneficiaries will receive INR 75 lakhs as the death benefit, depending on the type of policy.
If you choose an increasing policy, then the value of a 75 lakhs term insurance radically increases. Therefore, your family would be able to meet their financial needs, pay for liabilities, and have enough left over for their future planning.
If you choose a decreasing 75 lakhs term insurance, then your beneficiaries will receive a smaller settlement but it will still be massively advantageous. As part of their liabilities will be settled, they can use the money to invest in their future.
If you do not want any changes in your sum assured, you can always choose a levelled 75 lakhs term insurance plan. The settlement amount remains the same, and you can avail of tax benefits on your annual premiums.
If the income vs expense ratio in your family is higher, then you can always opt for higher coverage. A 75 lakhs term insurance is usually a beneficial plan as the sum assured is sufficient for average to high-income families.
How do tax benefits make 75 lakhs term insurance a good choice?
According to Indian taxation laws, you can claim tax benefits on your term insurance plan, if you meet the following criteria:
- The annual premium should be lower than INR 1.5 lakhs.
- The annual premium should be less than 10% of the sum assured.
A 75 lakhs term insurance plan is available for very low rates of premium, especially if you purchase the plan at an early life stage. Ergo, you can claim tax benefits for the entire duration of your premium payments.
Conclusion
75 lakhs term insurance is not only adequate coverage for your loved ones but it is also easily available for low rates of premium. You can enjoy the benefits of the policy during the course of your life, as well as secure your family’s future with little investment.