Importance of Term Insurance for Business Owners

Every country is struggling to protect the health of its people against the pandemic. The decline in the global economy has affected the livelihood of many. Businesses across the globe are facing a financial crunch, and the situation in India is no different.

Many people in India are self-employed, and the on-going situation is likely to affect their finances severely. Hence, it is better to have an insurance plan that safeguards you and your loved ones in case of financial emergencies. And a term life insurance plan is just the right choice for self-employed individuals.

Are you wondering why? The following section will enlist the importance of business owners having term insurance.

  1. Term insurance offers a safety net

Ideally, a term insurance plan is known to provide death benefits to the beneficiaries of the policy. During such unprecedented times, if anything were to happen to you, your loved ones will receive a lump sum amount. The amount can be used by them as and when needed to accomplish their life aspirations.

Moreover, insurers in India also allow you to enhance the scope of the policy with rider benefits. You can opt rider benefits such as critical illness cover, accidental death cover, the return of premium cover, waiver of premium cover, etc. Know that each rider benefit you opt for will increase the basic term insurance premium amount.

  1. Term insurance offers a high sum assured amount at a nominal price

Term insurance is the most affordable life insurance product available in the market. The premiums of the policy are cheap compared to any insurance instrument in India. In fact, you can secure a high sum assured amount as coverage for minimal premiums.

Just know that any rider benefit you opt will increase the term insurance premium amount. You can use the term insurance calculator to determine the premiums applied on your chosen coverage. That way, you will be able to choose the most affordable term plan that also fulfils your needs.

  1. Term insurance offers tax benefits

The term insurance tax benefits are widely popular. You can claim deductions on the premiums paid towards the policy under Section 80C of the old income tax regime. The death benefits received by the beneficiaries are tax-free under Section 10(10D) of the Income Tax Act, 1961. In case you have opted for critical illness benefit, you can claim additional deductions under Section 80D.

  1. Term insurance secures your future

When it comes to financial planning, securing the future of your loved ones is the top-most priority for investors. Also, you need to find the perfect blend of insurance and investment to achieve your financial objectives.

A term life insurance plan allows you to secure the financial future of your loved ones in case anything were to happen to you. So, even in your absence, your family can continue leading their lives without any financial crunch. This can come in handy, especially if your family’s finances majorly depend on the business.

In case you have taken a loan to sustain the business during this pandemic, your absence can affect the financial condition of your family tremendously. Having a term insurance plan will ensure that the payout received from the policy keeps the financial strain at bay. The family can use the death benefit amount to repay any existing liability.

How to buy Term Insurance in India?

Business owners can buy term insurance plans in India online. Just follow the steps below to buy the policy –

  1. Visit the insurer’s website.
  2. Go to the term insurance section.
  3. Choose the kind of coverage you need.
  4. Select the rider benefits that you may require.
  5. Review your policy thoroughly.
  6. Make premium payments online.
  7. The policy will be issued to you in no time.

The Bottom Line

Tough times like these reiterate the importance of adequate life insurance coverage in our lives. A term insurance plan is the most affordable insurance product as it provides extensive coverage to your loved ones at a minimal cost.

So, look for a term plan that aligns with your rising financial needs and can be sufficient to cover the financial future of your family.