How Essential is Term Insurance for your Family in Today's Time?

Coronavirus seems to the buzzword these days. Also known as Covid-19, the global outbreak of this disease has affected nations and their people adversely. After claiming a million lives across the globe, the growing impact of the virus has become a looming concern. Even though the government is taking all the necessary steps to curb the spread of Covid-19, it is essential to protect yourself and your family by choosing your precautions. 

Having said that, if you have ever neglected to take a term insurance policy, then now is your time to act responsibly to invest in one. It has become crucial to be prepared against any unfavourable situation arising due to the pandemic. With a robust term insurance plan, you will not only be able to protect yourself but also your family against all kinds of eventualities. 

Following the Covid-19, the insurance landscape has changed significantly, and people are now taking insurance policies more seriously, preferring term insurance over other plans. According to insurers, the post-Covid era will witness new trends that will transform the way you have been looking at insurance policies so far. 

However, many people worry if existing term insurance in India provides coverage to families against the death caused due to coronavirus and if you can purchase the term insurance after contracting the disease. These are some essential questions that we will try to answer in this article. But first, let us understand what the term plan is.

A term insurance plan is the life insurance policy which promises to pay the sum assured in case of the unfortunate passing of the insured person during the policy. 

As the world comes to astandstill - fighting unprecedented public health emergencies, protection of a life insurance plan can make a huge difference. The good news is that most reputed insurance providers are offering protection against the coronavirus by removing the force majeure clause. According to this clause, the insurers deny claims that arise due to events such as earthquakes, hurricanes, or any other natural disaster. But with Covid-19, things are different. 

Let us see how term insurance in India can help you overcome the financial as well as health-related concerns due to coronavirus. 

Family-wide coverage

If you are buying a new term policy following the coronavirus crisis, the benefits will vary from one insurance provider to the other. Therefore, it is essential to compare the plans online and choose the one that offers the most comprehensive family-wide coverage. However, if you are an existing term insurance policy owner, then you would still be eligible for a death claim in an event the insurer passes due to the disease. 

Additionally, you can also add riders to your policy, such as a critical illness that covers COVID-19 in its policy document. This simple addition will allow you to pay for the expenses if you are diagnosed withCovid-19 positive. From consultation to medication and hospitalization, everything will be taken care of with the sum assured that will be released by your insurer, thus preventing you from digging into your savings. 

Loss of Income 

Term insurance in India has picked during coronavirus amongst people who have financial dependents. The uncertainty around employment has pushed people towards these products. Due to the market volatility, term insurance offers the stability of a pure insurance plan is a risk-free investment that allows you to stay invested, even during times when the loss of income is a real threat. 

Tax benefits

During these uncertain times, when income has already taken a hit, term insurance plans make you eligible for tax benefits that will save you money in taxes and increase your paycheck. You are eligible to save up to Rs. 1.5 Lakhs per annum on your term insurance premiums under Section 80C. So if you are an existing policyholder or planning to invest in one, then now is a good time as any to start shopping for a viable life insurance plan. 

Apart from tax savings on the premium, you are also eligible for benefits on the returns under section 10 (10D). According to this provision, the death benefit received is also fully tax-exempt. 

Peace of mind

The need for a life insurance plan is now more crucial than ever. The COVID-19 outbreak has exposed you to financial vulnerabilities and served as a wake-up call for many. This is an excellent time to review your financial portfolio and add suitable term insurance policies if you haven't already. In such times, a robust plan offers you great peace of mind that your family's financial wellbeing will be protected, even if something happens to you. 

As you continue to explore suitable term plan options, don't forget to compare quotes and benefits online before investing. You must understand the available options and how it will protect you as well as your family against this global crisis.