When you are single, insurance may seem like an unnecessary expense since there is no one dependent on you financially. However, there are several benefits that term insurance provides to you as a policyholder, even when no one depends on you monetarily. Term insurance is a financial instrument that provides you with a life insurance cover for a fixed period. It is popular for providing huge sum coverage at an affordable premium. Being a single individual with no dependents, here are some reasons to consider buying term insurance-
- Helps in saving taxes
While the primary motive of a term policy is to provide you with a life cover, it can also be sued to save tax. Use a term insurance plan calculator to get an estimate of the premium you have to pay to get your desired sum assured. These premiums that you pay when you buy term insurance are all exempt from taxes. According to section 80C of the Income Tax Act, you get tax deductions of up to Rs 1,50,000 annually for the premiums you pay on insurance and similar financial instruments. Also, the sum assured that your nominee will receive after your demise is exempt from taxes under section 10 (10) D of the Income Tax Act.
- Provides protection against critical illness
Along with your basic term plan, you can also choose riders that provide add-on benefits. You need to pay an additional premium for the additional coverage that you receive, which is usually quite affordable. A sudden diagnosis of a critical illness can cause huge financial pressure on you. Heart attack, problems of the liver, and different cancers are some types of critical illnesses. The treatments for such illnesses incur heavy hospitalization costs and require extensive care. It can cost even lakhs of rupees depending upon the severity of the condition. You can simply add protection against critical illness to your term insurance and secure your health. With this add-on rider, for the tenure of your term policy, you receive financial cover against critical illnesses too.
- Provides coverage from accidental disability
In today’s uncertain times, accidental disability coverage has become one of the must-have riders of your existing term insurance. If a policyholder meets with an accident and is rendered temporality or permanently disabled, this rider applies. With this rider, the policy will pay a sum assured to the policyholder at regular intervals for the next five to ten years, depending on the situation. People often couple the accidental disability benefit rider with the accidental death rider. For both the riders, pay additional premiums for the additional benefit that you are getting. Use a term insurance plan calculator to get an estimate of the premiums after adding riders.
- Premiums are low
One of the biggest term insurance benefits is its affordable premiums. When you compare the premiums of a term plan to other life insurances, you find that term insurance usually offers the lowest premiums for your desired sum assured. Also, when you have no dependents or financial liabilities, payments of premiums would be a nominal amount. Also, the earlier you buy a term plan, the lower your insurance premiums are likely to be. In the long run, if you have any dependents or any liabilities, this decision will reap significant benefits.
- Simple and flexible
Term insurance is a simple type of life insurance with no savings or investment component attached to it. If you ever regret buying term insurance, canceling your policy is easy since there are no additional components to it. Once you inform the insurance company that you don’t need term insurance anymore and complete all the formalities needed, your term insurance benefits will cease to exist.
Term insurance is a decision that will secure your financial health for the long haul. Even though you do not have any dependents now, it does not mean that you never will. There are different stages of life, and each stage has different needs. Any life insurance that you buy is a long-term investment for you and your loved ones. The earlier you secure your life, the more stress-free your future will be.