What are the features and benefits of Term Insurance?

21 Feb 2022|

1 min read |

by ICICI Securities Team

Introduction

Term Insurance is a Life Insurance Policy designed to secure the future of your loved ones when you are no longer around to provide funding for them. A Term Policy is one of the basic policies that everyone should include in their financial planning. The relatively low premium and high coverage make Term Insurance an attractive plan for meeting the future family goals in case of the untimely death of the earning member.

For example, if someone buys Term Insurance where the sum assured is Rs. 2 crore for 30 years, this amount gets paid to the nominee as the lump sum amount if the policyholder passes away during the policy period. Here are the Term Insurance benefits and features that make it worth the investment:

Premiums are affordable

Premium associated with a Term Policy is more affordable compared to other insurance in the market. The premiums go as low as Rs. 400 monthly. Moreover, the earlier you buy your Term Insurance, the lower the premium.

Tax relief

Premium paid towards Term Insurance enjoys tax benefit under section 80C of the Income Tax Act. Moreover, the nominees who receive the lump sum after the policyholder’s death are exempted from taxes subject to Section 10 (10D) of the Income Tax Act.

Add riders

If you feel your basic Term Insurance does not offer enough coverage, you can always pay a nominal additional premium and opt for riders to enhance the same. Most insurance companies provide riders for Critical Illness cover where the policyholder receives the lump sum amount once diagnosed with a critical illness. Some insurers also permit waiver of premium rider, which exempts the policyholder from paying premiums if diagnosed with a critical disease or in the event of any disability.

Nominees receive the amount monthly

If you opt for a fixed monthly income Term Insurance, the nominees receive the entire insured amount as a monthly payment over a specific duration. For instance, if the sum insured is Rs. 2 crore, the insurance company pays a fixed income of Rs. 50,000 over 10 years. This is especially helpful to ensure the better financial security of your nominees if they do not have a steady income source.

Enjoy premium return option

This allows you to enjoy the maturity benefit of your Term Policy. While you may have to pay a higher premium, you also receive the total amount if you survive the policy period.

Whenever you are choosing Term Insurance, exercise extreme caution. After all, you want to protect the future of your family during emergencies. Read the policy document carefully and opt for an insurance provider with a strong market reputation and a good claim settlement ratio.

Disclaimer

ICICI Securities Limited has its registered office at ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400025, India, Tel No:- 022 - 2288 2460, 022 - 2288 2470. The non-broking products / services like iLearn and Financial Learning are not exchange traded products / services and ICICI Securities Ltd. is just acting as a distributor/ referral Agent of such products / services and all disputes with respect to the distribution activity would not have access to Exchange investor redressal or Arbitration mechanism. iLearn is not an exchange traded product/service of ICICI Securities Ltd. All disputes with respect to the activity on the platform would not have access to Exchange investor redressal or Arbitration mechanism.

ICICI Securities Ltd. is a Member of National Stock Exchange of India Ltd (Member Code :07730), BSE Ltd (Member Code :103) and Member of Multi Commodity Exchange of India Ltd. (Member Code: 56250) and having SEBI registration no. INZ000183631. ICICI Securities Ltd. is a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990. Name of the Compliance officer (broking): Mr. Atul Agrawal, Contact number: 022-69997051, E-mail address: complianceofficer@icicisecurities.com Investments in securities markets are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. ICICI Securities Ltd. and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Such representations are not indicative of future results. The securities quoted are exemplary and are not recommendatory. AMFI Regn. No.: ARN-0845. PFRDA registration numbers: POP no -05092018. ICICI Securities Ltd. acts as a Composite Corporate agent having registration number -CA0113. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund, Corporate Fixed Deposits, Bonds, Alternate investment funds, Tax planning, Succession planning, NPS, IPO, Investment Advisory and Loans related services are not Exchange traded products and ICICI Securities Ltd. is acting as a distributor to solicit these products. Please note, Insurance related services are not Exchange traded products and ICICI Securities Ltd. is acting as a corporate agent to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The non-broking products / services like Research, etc. are not exchange traded products / services and all disputes with respect to such activities would not have access to Exchange investor redressal or Arbitration mechanism. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.

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