What is term insurance? Why is it necessary to have insurance in 2025?

What is term insurance? Why is it necessary to have insurance in 2025? A job loss, accidents or a health emergency are uncertain expenses in life that can cause extreme stress to people, which is why people should be financially secure and have some savings for the future, but also with that people opt for insurance. Which is a scheme for any medical emergency where people are provided coverage of their medical bills or other expenses during emergency situations. There are many types of insurance and one of them is term insurance.

Contents

What is term insurance?Key Features of Term Insurance Why is term insurance necessary?Financial Protection for Your Family Debt Repayment Affordable Way to Secure the Future Inflation Protection Peace of Mind Who Should Buy Term Insurance?Conclusion

Today we will talk about term insurance and why it is necessary to get term insurance in life. To know more, read this blog by Matlabi News.

What is term insurance?

Term life insurance is a type of insurance where the insured person, if passed away suddenly, and his family member, who is named as the nominee, gets the amount of money from the insurance company. It is usually the case of the earning member of the family in case of their death; the other members do not have to rely on other people for their expenses. A type of life insurance policy that provides coverage for a specific period or “term.”

Unlike other types of life insurance, such as whole life or endowment policies, term insurance does not offer a maturity benefit if the policyholder survives the term. In simple terms, term insurance is a pure protection plan designed to provide financial security to your loved ones in case of your untimely demise.

Key Features of Term Insurance

Some of the features of Term Insurance includes these

Affordable Premiums: These are mostly affordable with monthly, quarterly or yearly premiums to deposit.
Flexible Policy Terms: The policy terms are flexible according to people’s needs and wishes.!
Large Sum Assured: The policy assured a large sum afterwards, which would be useful.
Tax Benefits: It qualifies for tax deductions under Section 80C of the Income Tax Act in India (or equivalent provisions in other countries). The death benefit is also usually tax-exempt.
Add-ons: Additional benefits like critical illness cover, accidental death benefit, and waiver of premium can be added for enhanced protection.

Why is term insurance necessary?

If you are wondering about taking a term insurance policy or not, here are some reasons why it is necessary to have one.

Financial Protection for Your Family

Term life insurance provides protection to loved ones after their demise so that they do not have to rely on others for basic needs.

Debt Repayment

If a person has any home loans or car loan debts, this also helps in paying the full amount of the loan so that there will be no debt left on the person.

Affordable Way to Secure the Future

The key feature is that anyone can afford their premium, as they are pretty affordable. One can deposit monthly, quarterly or annually payments for their premiums.

Inflation Protection

Long-term insurance plans offer the option to increase the sum assured over time, ensuring your family’s future financial needs are covered even in the face of rising costs.

Peace of Mind

At last, it provides peace of mind to people for their future and family members future. This makes them feel stress-free and relaxed.

Who Should Buy Term Insurance?

Term insurance is essential for breadwinners, young professionals, parents, and individuals with loans to secure their family’s financial future. One who has the responsibility of other non-earnings members, like kids or old retired parents, should consider taking insurance for the safety and financial security of their family.

Conclusion

To choose the right policy, assess your family’s needs, select a sum assured 10-15 times your income, and pick a term aligned with your financial goals. Enhance coverage with riders like critical illness or accidental death, and compare policies online for the best benefits at affordable premiums.

So this was What is term insurance? Why is it necessary to have insurance?. I hope you got answers to all your questions. For all the latest updates regarding entertainment and fashion, stay tuned with Matlabi News—your one-stop solution for all hot trends and gossips.

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