By As a breadwinner of a family, it is your responsibility to take care of the finances of your loved ones. In your presence, your earnings will meet the monetary needs of your family. However, it is important to have a financial safety net that keeps your family secured in your absence.
As a self-employed individual, your earnings depend on your business. No matter how big your turnover is, it is important to have a financial backup that will help your family in your absence. A term plan is a great option to go about it. What is a term plan? Term insurance is a life insurance policy that provides coverage for a defined period. In case of your demise during the time frame of your policy, the insurance company provides a pay-out to your nominee.
Here are some reasons why term insurance is the perfect fit for a self-employed individual –
Affordability
One of the biggest reasons several individuals choose term insurance plans is their affordability. Term insurance provides life cover of a huge sum at affordable premiums. As a self-employed individual, there is no fixed source of income. A low amount of premium ensures that, in the ups and downs of your business, you can easily pay the premiums for your policy. Look for term plan premium calculators that help you estimate the premiums that you will have to pay for different covers.
Lack of insurance from an employer
When you are working a 9 to 5 job, the company usually provides benefits like employee provident fund, life insurance, and medical cover. Being a self-employed individual, you will have to provide these benefits to yourself. Investing money for your future and safeguarding your family’s financial needs in your absence is your responsibility. When you are fulfilling your financial goals, a term policy can help provide the much-needed life cover.
Huge coverage compared to traditional insurance
Compared to other types of life insurances, a term insurance policy provides a higher sum assured. Term insurance will ensure that you leave enough funds with your family and dependents in your absence. It will ensure that they do not face any financial hardships and have enough money for any expenses in the future. A sufficient cover will also ensure that your debts do not burden your family in your absence.
Tax benefits
The primary benefit of purchasing a term policy is to secure the future of your family in your absence. One additional perk is that it helps in saving taxes too. A term insurance policy provides tax relief under section 80C of the Income Tax Act. The term insurance premium that you pay is deducted from your taxable income.
Coverage against critical illness and disabilities
Apart from life cover, there are riders available which you can club to your existing term insurance. These riders offer benefits like critical illness cover, disability covers, and waiver. As these conditions are unpredictable and devastating to you and your family, it would be a relief to receive a sum from the insurance company on the basis of the riders selected.
How to buy term insurance?
The reasons mentioned above make term insurance policies quite popular, especially amongst self-employed individuals. You can purchase term insurance online as well as offline. There are official websites of insurance companies where you can buy a term plan quickly in a few easy steps. There are also insurance aggregators available online where you can compare the insurance policies of different companies to choose the best one. The online term plan premium calculators allow you to know the amount of your premium. If applying online feels difficult, you can buy the policy plan offline. You can simply visit the nearest branch of an insurance company and present the documents needed to buy your policy. Brokers and agents can also get the work done for you.
As a self-employed individual, choose an insurance company that is well-reputed and has goodwill. This will ensure that in your absence, your loved ones receive the sum assured with no hassle. A good term plan ensures that you and your dependents live a peaceful life.
