Leave a will not a Bill
Many young couples service home loans, car loans and have credit cards. Often ignored is the fact that liability for the facility does not disappear on the death of the debtor. Creditors will still seek repayment after the death of the primary borrower. Leave your family a will on how to manage the estate and not bills by having a term insurance corpus big enough to summarily cover such costs.
Give your family a regular source of income after your death especially where you are a sole breadwinner. Term insurance plans are designed to suit the needs of the beneficiaries to the deceased by organizing payments to be either a lump sum amount or regular monthly portions or a combination of both. A term insurance plan, therefore, would provide a steady source of income to maintain your family’s lifestyle in the event of death.
You will enjoy two main tax benefits with term insurance:
- All Premiums up to a limit of Rs 1 lakh are exempt from tax granted under section 80C
- The Payout from a death claim on a Term Insurance plan is fully tax exempt under section 10(10(d)) of the Income Tax Act.
For any prudent parent, it is without any doubt that term insurance would, therefore, top the agenda when planning attributed to the benefits that far outweigh the costs.