Has 2020 been the year of shocks and surprises? Well, definitely Yes! This year has been one of the most uncertain years. With the world facing an unprecedented pandemic to the global economic crisis affecting millions, the year has certainly put vulnerability of life in focus. COVID-19 has made people realize the importance of a reliable term insurance plan. However, it has also increased the mortality rate; thus, increasing the claims and burden on the insurer. In that aspect, many insurance providers have hiked the premium rates, which are expected to shoot even higher. Hence, it is best to buy an economical cover at the earliest.
Why should you buy a Term Plan in 2020?
The COVID-19 pandemic has caused not only severe health distress but also financial distress for many. The loss of the primary breadwinner can cause financial strain on the family. This is where a term plan comes into the picture.
A term plan provides high sum assured at extremely affordable premium costs. As it is a no-frills attached life cover, term insurance has a pretty seamless claims process as well. Moreover, to help affected insurers deal with the COVID-19 situation and ease some burden of the affected families, leading insurers have launched a further simplified process. Affected families or the nominee can file a claim with minimal documentation as listed below:
- Policy documents.
- Death certificate from the Municipal Authority.
- Cancelled cheque by the beneficiary.
- KYC of the beneficiary.
- A report testifying the cause of death of the insured due to COVID-19 complications.
Thus, a term insurance plan from a reliable provider can help mitigate the financial liabilities arising from the death of the sole breadwinner due to the pandemic. Kotak e-Term plan has proved to be a strong companion in such dire times.
Here is why you should buy Kotak e-Term plan in 2020:
- Kotak Life provides a comprehensive life coverage with COVID-19 cover at economical premiums of less than ₹19 per day:
Multiple insurance providers have increased their premiums and charges in the wake of the rising mortality from COVID-19. There has been a suggested rise of about 40% in the charges post-April 2020. But understanding the criticality of recent times, Kotak e-Term plan still serves as an economical method (less than ₹19 per day) of gaining a high level of protection. The insured can get security against unfortunate events such as critical illness, accident, and disability at a price which will not hurt the budget.
Moreover, e-Term plan by Kotak Life Insurance also provides benefits for claims made against the death of the insured due to COVID-19.
- Kotak’s pure term plan is unaffected by the market changes:
The year of 2020 has seen the fall of even the mightiest of economies. The economic slowdown, further aggravated by the COVID-19 situation, has dropped the value of stocks and reduced the worth of assets. This, in turn, has led to an overall declining value of the investor’s portfolio. Hence, in 2020 the objective should be to have adequate life insurance to protect the long-term goals. A term plan does not bear any savings or investment component and hence, is safeguarded from such fluctuations. It is simple to understand and does not include complicated options.
- Kotak e-Term plan helps to maximize tax benefits by exempting the policy premiums and maturity amount:
Buying Kotak e-Term plan in 2020 is also very advantageous because of the two-fold tax benefits. Under Section 80C of The Income Tax Act, 1961, the premium paid for a term insurance plan is tax-deductible up to ₹1.5 lakh.
On the other hand, as per Section 10 (10D), the death benefit offered upon the demise of the insured is also exempted from taxation.
Conclusion
Overall, buying the Kotak term plan insurance in 2020 – the most uncertain year – will help insurers get lower premiums, easier documentation, faster processes and comprehensive coverage. Moreover, due to the current pandemic, buying life insurance now is a wise strategy. It can protect the family in these vulnerable times, as well as act as a cushion against falling asset values of 2020.
