Term insurance plans are considered as one of the basic financial necessities of one’s life, especially in today’s times. Term insurance plans offer financial security for the entire family in case of the unfortunate death of the policyholder, the insurance money will be handed over to the family as financial security.
This term plan will also help in availing optional coverage for critical illnesses or accidental death. As there are numerous insurance companies offering policies it gets difficult to choose the one best for you. With the help of a term insurance calculator, you can easily compare various plans and choose an insurance policy based on your needs.
Term Insurance Benefits
The following are the benefits of availing a Term insurance plan.
- Tax Benefits -You can avail tax benefits on premiums paid under Section 80C along with premium paid towards critical illness benefit under Section 80D of the IT Act.
- Affordable Premiums – Get access to a high-value life cover from a term insurance plan by paying an affordable insurance premium amount. The earlier you purchase a term insurance plan, the lower premium amount you have to pay.
- Accidental Death Benefit – Adding this benefit to your term insurance plan will offer protection against any mishaps in the future.
- Terminal illness coverage -Term insurance plans can give you lump-sum payouts in case of a diagnosis of terminal illnesses such as AIDS.
- Payout of Sum Insured – In case of the unfortunate demise of the insured individual, the family members will receive the sum assured as a payout. They have an option to choose the type of payout, either in the form of a lump sum, an income or a combination of lump sum and income or an increasing income.
- Coverage of Critical illness Coverage – In case optional critical illness coverage is included in your term insurance plan, you will get a lump sum payout upon diagnosis of any critical illness covered in the term plan.
- Complete life coverage – Term insurance plans offer substantially longer life insurance coverage.
Will the term plan cover COVID-19?
For policyholders with existing life insurance policies passed away due to coronavirus, the nominee of the policy will get the sum assured as the death benefit. This means that when the insured person dies, the term insurance benefits are paid to the nominee or the beneficiary nominee after a valid life insurance claim is filed.
However, if you plan on purchasing an insurance policy between the current pandemic situations then you should keep in mind that insurers determine the premiums of a policy on the basis of your health and medical history. If you’re still in the application process stage of the policy the coronavirus crisis will have an impact on your policy acceptance and premiums. Your insurance application might be put on hold or even rejected if the applicant has already contracted the virus infection.
Will COVID-19 be considered under critical illnesses?
It’s best to consider the life insurance policy add-ons and the benefits that will be paid out. For life insurance policies that offer critical illness benefits, you may not be able to make claims in an instance where medical advice was not provided to/by the policyholder. Even if this happens and the COVID-19 is covered as a critical illness the benefits on the policy will be paid out or not paid out based on the terms and conditions of the policy rider.