Currently, due to the coronavirus outbreak (COVID-19), the entire world is going through challenging times. This pandemic has affected India on a large scale. According to recent reports, the country has over 3 lakh active cases and over 23,000 Indians have lost their lives. In these trying times, buying the right term insurance plan can be the best way to safeguard your family’s financial future.
COVID-19’s impact on financial markets
As per reports, the pandemic has significantly impacted the normal way of life, which is directly affecting the Indian economy. Along with many other sectors, the financial market is also suffering. Financial experts are worried that it may take at least 12 months for things to get back on track.
Coronavirus has even impacted the life insurance sector in many ways; especially for the policyholder. As soon as COVID-19 was declared a pandemic, many people started panicking about whether a death due to this disease will be eligible for life insurance or not. If you are planning about buying a term policy, and are worried if the plan includes COVID-19, you will be relieved to know that most insurance providers cover loss of life due to this illness. Hence, you can purchase a term plan without any worry about claim rejection due to COVID-19.
Why term insurance is necessary
Financial stability should be your primary goal at this moment. The pandemic has taught us that the future is always uncertain. Hence, you must take every possible measure to safeguard your family’s financial needs. One of the most effective ways of doing so is by purchasing a term insurance policy.
If you are still unaware of what is term insurance, we can guide you about the same. It is a life insurance policy that you buy for a specific period or term. In case something unfortunate happens to you during this term, the insurer will pay a pre-decided lump sum to your nominees. This money will ensure that your family’s financial requirements are met during your absence.
The term insurance plan cover will offer you a large cover at an affordable premium, and you will have a peace of mind during these testing times.
Features and benefits of term insurance
A term life cover offers various features. Below is a list of the most important ones.
- Temporary coverage: The term policy covers you for a fixed duration, which means the coverage will be active temporarily.
- Pure life insurance policy: While other life policies may have additional features like savings, a term policy only offers the benefit in case of the policyholder’s passing. This is why it is a pure life insurance policy.
- No capital accumulation: The term plan does not have a capital buildup option. Your nominees receive a lump sum when they file a claim. However, this policy will not pay anything in case you survive the tenure.
- Fixed coverage: A term plan comes with a pre-determined monetary benefit. This means you will have to agree on the sum assured with your insurer while buying the policy. Your nominees will get this amount after the insurer approves their claim.
A term plan has many benefits, which make it a great investment towards the financial stability of your loved ones. Some of these include:
- It comes with low premiums, making it an affordable policy
- It offers a huge lump-sum as a benefit, which costs you less than other life policies
- It provides complete financial security to your family, as they receive a high sum assured
- It offers tax benefits under Section 80C of the Income Tax Act, 1961
Now that you the importance of a term plan in these worrying times, you must look for the policy that fits your needs. You can use a term insurance premium calculator to compare the prices of policies offered by different insurers before making a decision.