Is Term Insurance A Smart Investment?

1. Is Term Insurance A Smart Investment? • When it comes to saving your money, there are two things which should be ensured – building an emergency fund and investing for wealth maximization. Building an emergency fund is important to face the financial implication of a contingency which might strike. At the same time, investing for wealth creation is important for building a corpus for your financial goals. While there are different types of investment avenues for wealth creation, insurance is the most ideal solution for building an emergency fund. When it comes to insurance, there are different types of plans available. Some plans also offer a saving element to help you create a corpus for yourneeds. • Among life insurance plans, term insurance plansare the most essential plans for building an emergency fund. These plans help you create a financial corpus for your family in case you are not around. When you invest in the best term insurance plan you can opt for a high sum assured given the low premiums. The plan would, then, cover the risk of premature death and in case of your demise pay your family the sum assured giving them financial assistance to deal with the loss. Here are the benefits which you can get from the best term insurance plan– • High coverage at lowpremiums • Term plans are meant to cover the risk of premature death. They are pure protection plans and have no saving element. As such, the premiums of term insurance plans are low. You can, therefore, afford a high coverage which would enable your family to meet all its financial responsibilities even when you are notaround. • Moreover, you can choose limited pay term plans online which require you to pay premiums only for a limited period. When you buy these limited pay term plans online you pay for a limited period but you can enjoy coverage throughout the tenure. This allows you to avail high coverage without taxing yourpockets. • Financial security • A term insurance plan ensures the payment of death benefit in case of your unfortunate demise during the policy tenure. This surety gives you and your family financial security as you know that an unforeseen emergency would not land your family in a financialcrisis. • Comprehensivecoverage • Nowadays, term plans have gone beyond the traditional coverage for premature death. In modern day term plans you can find coverage against death, disablement and even critical illnesses. Nowadays, term plans come with inbuilt rider benefits and also allow you to opt for additional riders to enhance your coverage. These riders ensure that you get covered for different types of contingencies and are financially compensated if any contingency arises. In fact, some term plans also allow you to opt for lifelong cover by allowing coverage up to 99 or 100 years of age. These plans are offered as limited pay term plans online where premiums are paid for a limited period but the coverage is allowed lifelong. This gives lifelong protection and makes the planbeneficial. • Taxbenefits • The premiums that you pay towards a term insurance policy are allowed as a deduction from your taxable income. You can claim a deduction of up to INR 1.5 lakhs by investing in the best term insuranceplan. • Given these reasons, term insurance plans are a smart investment. However, you should not expect these plans to give you any investment returns. From the perspective of pure investmentreturns,

2. term insurance plans do not give any returns. They simply cover you against the risk of premature death. If you are looking for investment returns, you should invest your money into a suitable investment avenue. Do not mistake term plans with investment plans. Term plans are protection oriented plans meant for creating financial security. Emergency planning is essential so that other financial goals are fulfilled even when life throws a challenge your way. A term insurance policy helps you in this emergency planning. It helps you create a secured corpus for your family so that they can fulfil their financial obligations even when you are not around. So, make a smart move and invest in a term insurance plan for protection. Once you are protected, you can invest your money into investment avenues for wealth maximizationtoo!