As a responsible family person, you may continually strive to provide a better future for your loved ones, right? A sound financial plan can help you make your dream of giving the best of everything to your children, spouse and parents a reality. Financial planning is a systematic approach to determine if you have the financial resources required to meet your long-term goals and cover any unexpected expenses that may arise in the future.
An essential aspect of financial planning is purchasing life insurance like a term insurance plan. It helps you secure your family’s financial future if something happens to you. Let us look at the importance of term insurance plan in long-term financial planning.
It secures the future of your loved ones
A term insurance policy gives you and your family a financial cushion against future uncertainties. You can decide the coverage you want, and the insurer will determine the premium you must pay accordingly. In the event of your unfortunate demise during the policy period, the insurer will pay the death benefit to the family member. They can use the amount to meet their regular expenses and be financially independent.
Helps your family manage debts
One of the critical aspects of a sound financial plan is to have the necessary resources to manage the debts and loans you may acquire over time. Buying a term insurance policy can help you and your family in this regard.
While buying a term plan, choosing the insurance tenure that is equal to your loan tenure or longer is better. Typically, debts like home loans have a repayment period of 20 years or more. If something happens to you during the period, the repayment burden will fall on your family members, who may already be distressed by losing a family member.
But with a term plan in place, your family can use the death benefits they receive to pay off the loans and manage the debts without any hassles lifeline hospital.
Focus on other financial goals
Apart from securing your family’s financial future, you may have many other long-term and short-term financial goals like buying a new house, sending your child abroad for education, accumulating a retirement corpus, etc. By purchasing a term insurance policy for your family at a young age, you get coverage at an affordable premium.
This means that you can now focus on achieving your other goals. You can invest in other instruments like mutual funds, ULIPs, and an assured savings plan that gives you valuable returns in the long run.
Enjoy tax benefits
Tax saving is a critical aspect of financial planning. By purchasing a term insurance policy, you can enjoy valuable tax savings under different sections of the Indian Income Tax Act. The premium you pay for term insurance is eligible for tax benefits under Section 80C of the IT Act. Similarly, the death benefits your family may receive from the insurer after your demise are tax-free under Section 10(10D) of the IT Act bitsandboxes.
Now that you know the importance of term insurance in long-term financial planning, get a term cover now and secure your family’s financial future.