Reasons why every Indian family should consider having a Term Plan | PNB MetLife

Indian family system is one of the unique components of our society. It has always acted as a form of support system for every individual in the family, whether it is the son, daughter-in-law or a grandchild. This cohesion is very well understood by the market insurance instruments as they are designed to cater to not just individuals but a family in large. A term plan is one such market life insurance product that financially protects your family in case of your untimely death.

What Is A Term Plan?
A term is quite different from other life insurance products because it offers protection only for a specific time period which can be 10 years to 30 years. It primarily comes with a death benefit, wherein the sum assured is paid to the appointed beneficiary upon the death of the insured. Certain term plans also offer a maturity benefit to the policyholder on the completion of the term. 

Term plans are quite popular among many Indian families as they are able to cater to the specific needs of most average Indian families. 

Let us have a brief look at the reasons why a term plan is important as well as the most preferred form of insurance product. 

1. Financial Goals
   In order to understand why term plans are used by most families for meeting financial goals, one needs to see how a term plan works. The financial cover of term plan can be linked to your existing loans and debts so that in case of any unfortunate accident, your family does not get buried under the financial pressure. Moreover, if you are able to complete the whole term, you might receive the assured amount, which can be used to pay off your existing loans and debts.
2. Life Cover
   Most people purchase term plan for family as it keeps the family financially secured in case of any mishappenings. This is predominantly applicable in households with a single earning member. Till the time the member is alive, there is no issue related to the finances. But, as we all know, life is uncertain and therefore getting a life cover can help protect your family from any financial hardships.
3. Low Premium
   As already discussed, term plans are not for the whole life, which is why the premium for term insurance policies are comparatively lower than that of life insurance schemes. The affordable premium makes it fit for even the low-level income groups to get a term plan for family without squeezing their pockets.
4. Tax Saving Benefits
   Tax benefits are one such aspect, where term plans score better than most other investment products. The benefits are two-pronged – the first one being the premium payment which is tax-deductible under Section 80C of the IT Act and the second one is the tax exemption under Section 10(10D) of the IT Act for the proceeds of the plan.
5. Low Claim Rejection
   The nature of term plans is quite simple and devoid of complexities as they cover only the life of the policyholder. Therefore, the claim settlement ratio is considerably high for term insurance plans reaching easily up to 98% for many insurers, thereby guaranteeing fewer rejections. It is crucial to check the ratio thoroughly before buying an insurance plan. Moreover, the Insurance Regulatory and Development Authority of India (IRDA) has also laid down that after two years of the policy tenure, no insurance company can reject a claim citing non-disclosure of facts.
6. High Flexibility
   The term is highly flexible in nature both in terms of increasing or decreasing the death benefit, thereby adjusting your premium. In many cases, if the life cover is less than 50 lakhs, there is no need for any medical check-up as well.
7. Customised Riders
   Term plans come with numerous riders, including health, accident cover, critical illnesses, etc. These covers are highly customisable and can be easily adjusted along with the life cover. However, the only thing to watch out in this regard is the inclusions and exclusions that are stated in the policy document.
8. Low Brokerage
   In case you are opting to buy term insurance offline, there will be some brokerage charge associated with it. Nonetheless, as the brokerage charge is calculated as per the premium rates, which already is low, the brokerage fees are automatically reduced. 

All these reasons attract Indian families towards buying a term plan for family. However, it must be understood that like every financial instrument, the term plan also has its flaws. However, the flaws can be minimised if you carefully evaluate the policy documents and look for those areas that benefit you the most. Visit PNB MetLife to know more about Immediate Annuity Plan, Endowment Savings Plan Plus & Long Term Savings.