Importance of Term Insurance During the COVID-19 Era

Overview – 

Costs pertaining to medical aid and health care have been rising at a rate that is frankly appalling. This interspersed with the incremental rise in costs associated with maintaining a general standard of living has made it hard for people to carry out their daily lives without having the pressure financial burdens bring with them. The Coronavirus pandemic and consequent lockdowns have further added to this pressure as the economy hasn’t been able to avoid the harsh consequences that the sudden imposition of social distancing has created. Those reading this article are encouraged to purchase term insurance for themselves such that they can secure for themselves and their family a layer of financial protection in the form of coverage provided by this plan. The importance of this form of insurance cannot be stressed enough for those who are the sole earning members in their family.

How Does Term Insurance Operate? -

Term insurance is one of the most fiscally sound and economical forms of life insurance currently available in the market. Policyholders who avail of term insurance are expected to pay a premium. They are then insured and provided with coverage that is valid for a specified time frame that has been outlined in their term insurance plan that they selected keeping in mind their preferences. In instances of policyholders dying in the time frame outlined by their term insurance policy, the people they identified as beneficiaries avail of a death benefit that is paid by the term insurance policy issuer.

The Role Played by Term Insurance Premiums

Term insurance premiums help indicate the amount of money that is expected to be paid by the insured individual to the company responsible for providing them with a term insurance policy of their choice. The price allocated to a given term insurance premium may vary with reference to the sum assured that the policyholder decides to ultimately avail of from their plan. 

Fast Facts Pertaining to Term Insurance that Highlight its Importance – 

  • Term insurance provides coverage in the event of an untimely death. 
  • Owed to the aforementioned fact, premiums paid are affordable and easy to manage.
  • Policies that provide higher sums assured can be availed of for a reasonable amount.
  • Long-term coverage is accessible under these plans which are capable of lasting 67 years or until an individual turns 99 years old.
  • Those who avail of term insurance plans are entitled to tax benefits. As per facts stipulated in Section 80C of the Income Tax Act of 1961, insured individuals may receive tax benefits as well as deductions. When looking at deductions, they are applicable to premiums paid up to an amount of INR 1.5 Lakhs per annum.
  • It is important to understand that tax is only levied once the policy matures and the sum assured is provided to the policyholder or their family. This means that policyholders are capable of saving their money and can allow it to balloon prior to having it taxed. 
  • With the aid of a term insurance calculator, one can anticipate the premium applicable to their policy with ease.


Conclusion –  

The Covid-19 pandemic has brought with it major changes that have adversely impacted healthcare systems in place, the general health of the population in addition to leading to downturns in the economy. By availing of term insurance (whose premium can be calculated via a term insurance calculator) via Finserv MARKETS, individuals can rest easy in the knowledge of having a layer of financial protection.  

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