Term Insurance with Maturity Benefits

Term Insurance with Maturity Benefits: More than Just a Life Cover

Experts say that a solid financial plan remains incomplete without an insurance policy. It is very important for planning contingencies. Although we know that a term insurance covers our future, some policies that come with maturity benefits offer a number of additional benefits.

Why do these Term Plans stand out?

Term insurance with maturity benefits serves mainly two purposes. Primarily, they can be highly cost effective, because they have lower premium rates. And secondly, apart from providing a life cover, they provide guaranteed returns on the premium paid during the tenure of the policy, in the form of maturity benefit.

Standalone Elements of Maturity Benefit Plans

This works like any other term plans. Maturity benefits are one of the most attractive features of this type of policy. Apart from just covering you life, the policy will return your premiums in case your do not die.

1. Premium: Like any other insurance, this also works on a “level” concept. So, your premium would remain unchanged throughout the term of the policy, unless and otherwise the policy is broken or revoked, in which case a renewed premium might be worked out.

2. Maturity Benefit: This is the amount payable to the insured upon maturity of the policy. One special feature of term insurance with maturity benefit is that, the plan allows the premium been paid over the years to be refunded, if there is no such life calamity. Some insurance companies provide additional benefits and guarantees. For instance, some polices offer a discounted rate, while others may offer a bonus amount.

3. Death Benefit: The sum assured in a term insurance plan with maturity benefits is payable to the beneficiary in the event of death of the person insured.

Additional Advantages

1. Mid Term Benefits: You have the option of taking a mid-term benefit policy as well. When you survive past the mid-term of the policy, the insurance company will return 40% - 50% of the premium amount, or the percentage stipulated in the policy document. So if you do not want to wait for the full term, then you can even take up a mid-term plan.

2. Assured Income: It is the most popular instrument for retirement planning. This is simply because, the money saved during your working period, will be utilized to provide a steady source of income during retirement.

If you are planning to take up a life cover, opt for a term insurance with maturity benefits, considering all its advantages.

Best Investment Options

Taxing Saving Investment Options
“In this world nothing can be said to be certain, except death and taxes”
~Benjamin Franklin

The above quote says it all. Taxes are a permanent factor in our lives. However, if you are well informed about tax matters, there is nothing to worry. Although our government has levied taxes, they have also provided ways to reduce our tax obligations. The best way to save taxes is by making investments. You need to choose the best investment option, considering your tax obligations.

If you are looking to reduce your tax liability, you will find many options under Section 80C, 80D and 80G of the Income Tax Act. A good tax saving investment tool should provide you the following benefits.

1. Maximum tax savings
2. Low cost of investment         
3. Minimum risk
4. Substantial returns

Top 4 Tax Saving Investment Options

Here are the best investment options that would help you reduce your tax liability as well.

1. Life Insurance
The premium you pay for your life insurance policy is deductable form your total income, under section 80C of the Income Tax Act. This ultimately lowers your taxable income, which in turn lowers your tax liability. So although it is not an investment which will fetch you sure shot returns, you have a lot to gain from them. Also, under Section 10(10d), the claim amount paid to the beneficiary is exempted from tax.

2. Health Insurance
Although this is not considered as a pure form of investment, it does have its advantages. Under section 80D of the Income Tax Act, the premiums paid towards health insurance are eligible for tax deduction. Moreover, if you choose add riders to your health plan; the lump sum you get in the event of an accident or other illnesses covered by the rider is not taxable.

3. Mutual Funds (ELSS)
Equity Linked Saving Schemes are specifically intended for saving taxes. Although they are high risk products, they offer the likelihood of high returns. The best part is that they enable you save taxes under Section 80C of the Income Tax Act. Moreover, they provide the shortest lock-in period of three years, on an average. This makes them one of the best investment options available today.

4. Loans
Although they are not an investment option, they are a great tax saving tool. Under Section 80E of the Income Tax Act, the interest on the repayment on higher education loans is tax free. Under section 80C of the same Act, home loan EMIs towards the principal are also exempted from tax liabilities.

Most of these options do not provide returns in the form of money. However, they get you the maximum money’s worth in form of insurance or loan. At the same time, they provide you tax benefits. So, you can consider them as some of the best investment options for saving taxes.

Life Insurance Solutions

Why Do You Need Life Insurance?

Experts say that a personal financial plan remains incomplete without planning for life insurance solutions. Having a life cover is important for mainly two reasons. Firstly, it enables you to protect your family against any financial crisis that might arise in the event of your death. Secondly, it helps you deal with financial requirements in some important junctures of your life.

Top 9 Advantages of Life Insurance

There are several advantages of taking life insurance solutions

A life insurance solution offers a wide range of advantages, which are unique to its kind. Here are some major benefits for getting a life plan.

1. Covers Risk - In today’s uncertain world, life is more unsecure than you could imagine. This makes it more important to have a life insurance policy that would provide financial security to your family even after your death.
2. Helps to Meet Your Financial Goals - Some life plans help you meet your financial goals – be it your child’s education, their marriage, building a home, or retirement planning.
3. Helps to Build the Habit of Saving - The contract necessitates you to pay a fixed amount periodically. This builds a saving habit. Regular savings will ensure that a corpus is built over a period of time. This will help meet your financial commitments through the various stages of life.
4. Makes a Profitable Investment - In India, insurance is a highly regulated sector. The government has set up ministries and departments to oversee policy transactions and ensure the safety of policyholders, through various regulations and rules. You can take life insurance solutions through long term instruments, which provide higher returns in the long run. These are a better investment option, compared to short-term instruments that promise higher returns but involve high risks.
5. Provides Assured Income - It is the most popular instruments for retirement planning. This is simply because the money saved during your working period will be utilized to provide a steady source of income during retirement.
6. Provides Protection -These policies help meet the dual need of long term wealth creation with the added protection.
7. Pays Dividends - Insurance companies usually distribute the income from investment among the policyholders through dividends and bonuses.
8. Provides Loan Facility - Some plans even allow you to take loans against the policy from banks and financial institutions.
9. Provides Tax Benefits - Most plans offer attractive tax benefits to the policyholder under Section 80c of the Income Tax Act.

Sudden death of the breadwinner can bring several expenses and financial burdens on your family members. Apart from funeral expenses, they may need to pay debts, pending taxes, and other expenses. Some life covers provide a lump sum death benefit, which is tax free. This benefit also helps pay off debts and can also be reinvested to provide an income for the spouse and children.