The coronavirus [COVID-19] outbreak might have created panic in your minds about your term insurance policies. Although the pandemic scenario might be intense, you should not fret about the life cover under your respective term insurance plans. As per experts, the current insurance policies can cover the coronavirus cases until and unless specifically excluded. If you wish to file a claim for the coronavirus infection, the regular process of hospitalization can be followed.
Before you buy term insurance plans to safeguard your family members from the COVID-19 outbreak, let’s understand the top four reasons that re-emphasize the need for term insurance under such a scenario:
Term insurance can let you pay low premium
Term plans can be one of the most affordable insurance products, especially if you buy it directly from your insurer’s online portal. When a term policy is bought online, you can avail the benefits of a low cost. Since the online term insurance plans might not involve any commission and external charges, you can qualify to make a low premium payment.
Another way to pay minimal term insurance premiums can be to buy term insurance at a young age. Since you might be physically fit at a young age, your insurer can provide you with a low premium amount. In simple terms, the fitter the health, the lower the premium.
Term insurance can offer tax benefits
Although a term policy offers tax benefits, you should not base the purchase decision on it. It can offer tax exemptions on the term insurance premium as well as maturity proceeds based on Section 80C and Section 10(10D) of the Income Tax Act, 1961. Let’s take a look at each of the available tax benefits under term insurance plans:
1. Section 80C
Premiums should be paid regularly to ensure the continuous flow of a life cover. As a policyholder, you can qualify to claim a deduction up to Rs. 1, 50,000 on your taxable income.
2. Section 10 (10D)
After the maturity period, you can receive a tax-free amount in accordance with Section 10(10D).
Term insurance can safeguard your loved ones
The primary reason for the formulation of term insurance plans can be the financial protection of your loved ones. If anything happens to you due to the coronavirus outbreak, your family can receive a financial payout. With the payout, your family members can stay protected financially as well as maintain their current standard of living in your absence even if it arises out of the coronavirus.
While term insurance plans can offer you with a lump sum maturity amount, you can also receive a combination of the lump-sum amount and monthly income. Moreover, your insurer can allow you to increase the term coverage every month to meet your routine needs as well as fulfill your family’s life goals.
Term insurance can allow you to incorporate riders
Term insurance plans can consist of in-built riders that can enhance your base policy at the nominal price. In the case of riders, such as critical illness rider or terminal illness rider, you should satisfy the terms and conditions of the add-ons to receive its benefits. On the other hand, if you opt for a waiver of premium rider, your insurer can waive the premium off if you contract the COVID-19 virus. The selected term policy will not lapse, and life cover continues.
To conclude, term insurance can play a significant role in the financial protection of your loved ones during the on-going pandemic in the country. Before you opt for term coverage, check with your insurer if it includes COVID-19 under the policy. Moreover, go through the terms and conditions carefully of the policy document after the purchase.