No matter what stage of life you are in, a financial plan can always help you get your life in order. Every individual’s financial needs are different and unique from that of the others, but at the core, it is always about knowing what suits your and your family’s needs the most.

The backbone of a financial plan is customising and bringing the right balance of your investments towards wealth creation and purchasing insurance such as term insurance, to feel more secure and reduce your risks in the long term.

Why Should You Choose A Longer Policy Duration?

One of the most important aspects of buying the best term policy is knowing how to choose your policy period carefully. Before buying term insurance, it is important that you decide on the policy period for which the coverage will last. Ideally, you must go for a timeframe that suits your present financial conditions and can easily help you fulfil your goals in the future.

Different insurance companies have varied policy terms that one can choose from, and their advisors also help you analyse your current situation and finances and then make an informed choice.

It has often been noticed that longer duration term insurance policies are far more beneficial than the ones with a shorter duration, as the longer the tenure lasts, the more it can accumulate in savings. If you are wondering how to choose the right policy period, then check out these parameters:

• Compare Term Policies

Right from comparing different premium rates and payment frequencies to understanding how one policy is different from the other in terms of benefits and features, you must analyse it all. Only once you have done due diligence will it be easy to select the Policy period.

• Compare Additional Riders

The best term policy can offer you numerous riders like accidental death, critical illness cover, partial or complete disability and even survival benefit if you have opted for term insurance with a return of premium policy. It would be advisable to choose a long-term for your insurance as you get the additional riders as extended covers as well.

• Consider Current Expenses

Often people are on a tight budget when it comes to buying best term policy. You can account for your personal expenses and then decide the premium amount payable every month, quarter, or year.

• Pen Down Your Future Goals

If you are still in your prime, then you would definitely have a lot of future goals to fulfil and what would be better than an extended-term insurance period to ensure that your family’s goals are met even in your absence.

What Are The Benefits Of A Long-Term Term Insurance Policy?

There are many term insurance benefits that a policyholder, as well as the beneficiaries, can enjoy through the policy lifetime. Here are a few of the most prominent benefits of holding onto an insurance policy for the longer term:

1. Disciplined Savings Habit

Buying best term policy is nothing short of a long-term commitment that an earning individual often makes, and it is this very habit of routinely paying premiums that can instil a savings habit in you. A disciplined saving or investing habit goes a long way in planning finances and helping you chalk out your future.

2. Extended Financial Security

If you opt for a long-term term insurance policy, then you can rest assured about your and your family’s financial security. If you are still in your prime, then it would be best to take as long a policy tenure as possible because it will guarantee extended financial security for your loved ones, and the add-on riders can be of help to you as well.

3. Lower Premiums

The longer your policy period is, the lesser your premium amount will be. If you are running on a tight budget or do not have a lot of provision in your earnings to pave the way for term insurance, then this is your best bet. Since your policy period is longer, you will have to pay a lesser amount in premiums on a monthly, quarterly, or yearly basis.

4. Tax-Saving Benefit

Under section 80C of the Income Tax Act, 1961, you can avail of a deduction on your taxable amount of up to Rs. 1,50,000, as per the old tax regime. However, you must remember that your annual premiums cannot exceed 10% of the sum assured offered in your term plan.

By selecting the best term policy, you can secure your family in the future without worrying about impending payments. However, do not rush into buying a term insurance plan without comparing policies from different insurers and running the calculations on an insurance and income tax calculator, which are available for free online.

Choose a trusted insurer with a high claim settlement ratio and a term insurance policy that customises to suit your needs and that of your family. Take the first step towards financial independence for yourself and your loved ones, starting today!

Information related to Tax Benefits has been sourced from the Income Tax Act