One of the most common life insurance policies that provide you with life protection for a certain period is the term plan. In simpler words, the 5-year term plan is a special case of an online term insurance policy that will provide you with coverage for 5 years.
You can easily purchase a term plan for a minimum of five years. The sum promised in this scenario will be made available to the nominee in the event of the policyholder’s death within 5 years. Additionally, purchasing the 5-year term plan has a lot of advantages, such as group term life insurance.
Read the blog to understand how the 5-year term life insurance plans benefit you.
Life insurance cover
Life insurance coverage is the main aim of a term plan. A fixed sum assured decided by the policyholder at the beginning of the policy is given to their family in the case of sudden death. This assured sum amount can be used to meet their daily requirements and fulfill their family goals.
Term insurance is considered the most affordable plan in the life insurance plan. It is suggested to buy a term plan for a high sum assured with premiums that are affordable for you to pay. Here are the following reasons behind this suggestion:
- Absence of maturity benefits
- The simple buying process
- There is no fund to manage, similar to another investment plan, like the ULIP plan.
Easy to understand
The 5-year term life insurance policy’s best feature is how simple it is to comprehend. The term plan does not require extensive information to understand. Additionally, investment component accumulation does not occur. It implies that you do not need to be involved in this long-term goal consistently.
Option to choose riders
A rider is considered an additional benefit with any life insurance plan. You can increase the coverage of your term plan online by adding the rider to it. A term plan rider consists of the
- Critical illness rider
- Permanent disability and accidental total disability
- Accidental death rider
The best thing about the term insurance plan is that it is eligible for several tax deductions under the income tax act. It means you can easily claim deductions up to 1.5 lakh on the premium you have to pay for the term plan.
When should you buy the term insurance plan?
The following conditions involve purchasing a term insurance policy:
- If you want to take a short-term loan for your urgent requirements
- You are close to your requirements, but you want to keep your dependants financially covered
- You are moving out of a remote location and country for a short time
- When the important financial goals of your family fall within a certain time.
Short-term needs are covered by five-year term insurance coverage. However, a good financial choice is a term insurance policy that will protect your family until you retire.
It is advised to secure long-term security, but it is also wise to invest in a short-term plan that meets your needs.