The COVID-19 pandemic is a “new normal” that has completely upended our lives and finances. From converting our homes into makeshift offices to obsessively washing our hands and hoarding hygiene goods, we’ve all had to adjust to a world vastly different from what we once knew.
However, there’s a way to plan for the future more carefully—not just for yourself but also for your loved ones. In times of uncertainty, the importance of life insurance and the support of life insurance policies can be invaluable. Fortunately, it can be simple to choose from the best life insurance policies available, be it term plans or savings policies.
This article will explore why life insurance in a pandemic is essential.
Term Insurance
Here are some of the life insurance benefits of term insurance policies during the pandemic:
- Financial security: The pandemic has caused widespread economic uncertainty, and term insurance can provide financial security for your family if something happens to you.
- Affordable premiums: Term insurance is one of the most cost-effective life insurance products, making purchasing a policy easier during these challenging times.
- Higher sum assured: Term plans offer extensive coverage and a high sum assured in exchange for a lower premium. This can support your loved ones financially in your absence.
- Flexibility: Term insurance policies can be customised to suit your specific needs. You can choose the policy term, the sum assured, and other features based on your requirements.
- Tax benefits: Term plan premiums are eligible for tax deductions under Section 80C of the Income Tax Act. This can help you save more money on your policy.
- Loan protection: If you have taken a loan, term insurance can help ensure your family is not burdened with the loan repayment in case of your unfortunate demise.
Savings Plans:
Savings plans are life insurance plans that provide an assured return at the end of the maturity period. They are designed to help individuals save and accumulate a corpus over the long term to meet their life goals while also providing the benefits of life insurance.
These are some benefits of savings plans that highlight the importance of life insurance:
- Guaranteed Returns: One of the primary benefits of savings plans is that they offer a fixed returns on policy maturity, regardless of market fluctuations. This ensures that the policyholder receives a predetermined amount, which can be used to meet their financial goals.
- Financial Security: The life insurance coverage under these plans provide financial security to the policyholder’s family in case of the policyholder’s untimely death. This can be particularly helpful during a crisis like the pandemic when financial uncertainty is high.
- Long-term Savings: These products are designed to help individuals save and accumulate a corpus over the long term. By investing regularly in these plans, individuals can build a substantial corpus to meet their financial goals such as education, marriage, retirement, etc. Tata AIA Life Insurance offers a range of life insurance policies, whether you’re looking for term insurance, savings plans or retirement plans as per your needs and goals.
- Tax Benefits: Savings plans also offer tax benefits under Section 80C of the Income Tax Act, which allows individuals to claim tax deductions on the premium paid. The maturity proceeds are tax-free under Section 10(10D), subject to policy terms and conditions.
- Flexibility: These products offer flexibility in terms of premium payment and policy terms. Individuals can choose the premium amount and policy term per their financial goals and requirements. They can also opt for additional riders, such as accidental death benefits, critical illness coverage, etc., to enhance the coverage.
Conclusion
Life insurance can be a valuable tool, as many have seen during the COVID-19 pandemic, as it offers financial security to policyholders and their loved ones in times of uncertainty.
Term insurance and insurance plans with guaranteed returns such as savings plans, offer unique benefits, such as affordable premiums, higher sum assured tax benefits, flexibility, and the potential for higher returns in the future. In addition, other life insurance benefits include with loan protection and crisis management during a pandemic.
