Term life insurance is a gift that keeps on giving! Not only do you have the satisfaction of knowing you have taken the time to buy your partner an important and thoughtful gift, but also the assurance that they will be covered should anything happen to you.
Most of you are familiar with Diwali, the festival of lights and good wishes. But do you know that it is also a very special time for your wife? If you're thinking of giving your spouse a gift for the upcoming festival of lights, then you are in the right place. Simply because there are many gift ideas for Diwali that tick all the boxes. However, out of all these gifts, maybe one will strike an emotional chord and connect with your spouse more than others - a term life insurance policy.
This article will go over term insurance in detail and provide you with an answer to why they are the perfect gift for your wife, this Diwali.
What is a Term Insurance Plan?
Term insurance coverage comes in a variety of forms. Many plans have fixed premium amounts for the life of the plan, such as 10, 20, 30 or more years. These plans are frequently known as the "level term" policies. The premium is a fixed payment, usually paid monthly, that insurance firms charge customers in order to offer the advantages of the insurance plan. These premiums are calculated by the insurance provider depending on the insured individual's medical condition, age, as well as life expectancy. Based on the insurance selected, a health check-up that examines the insured person's fitness, as well as the family's medical history, may be necessary.
Your premiums are set and need to be paid for the entire duration of the policy. If the insured dies before the policy expires, the insurance provider will provide the assured amount of the plan. There wouldn't be any coverage or reimbursement if the period expired and the insured individual died later. Policyholders can, nevertheless, renew or extend their insurance policy, although the new regular payment will be determined by the insured's current age and medical condition at the moment of renewal.
Why should you purchase Term Insurance for your wide?
When you are financially reliant on somebody, you may have to make compromises in other areas of your life. Your spouse may feel a similar way after working such hard to meet the needs of your household. Consider giving your wife financial protection in the guise of a term insurance plan, which will always ensure her financial safety. Notably, after your death, the housewife may utilize that money to complete all of the children's life education and ambitions.
Aside from that, under the 1961 Income Tax Act Section 80C, a term life insurance plan provides tax advantages on the total premium amount spent for the plan up to a limit of INR 1.5 lakhs. Section 10 (10D) exempts the lump sum death benefit amount obtained by the policy-specified nominee from taxation.
How to choose a Term Insurance Plan?
Here is a step-by-step breakdown of the process of choosing a term insurance plan for your wife:
The very first step would be to choose a sum assured. This amount should be something you feel comfortable leaving behind with your family if you happen to pass away. So, the higher the amount is, the better it is. But, it is important to know that a higher sum assured plan will need a higher premium payment. It is recommended that you opt for coverage of a minimum of 3-5 times your annualised income for your wife.
Another important point of term insurance shopping is calculating the premium rates. You do not want to pay more than the coverage you receive. So, it is recommended to compare and contrast different premium amounts and coverage bundles from different companies before purchasing your ideal plan.
In terms of coverage, make sure you have the most comprehensive plan available within the limits of your budget. Take notes of all the add-ons or riders made available by your insurance provider. These optional plans offer small pieces of coverage which complete your comprehensive policy.
Claim Settlement Ratio
The last point will be to compare the claim settlement ratio of your insurance provider. After all, a life insurance policy means close to nothing if there’s an issue at the time of claim settlement. Make sure the provider you are choosing has a decent claim settlement ratio.
So, if you're still wondering what to get your wife this Diwali, an insurance policy is it. Give her the gift of peace of mind and the gift of living a worry-free and contented life.