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Every individual needs to plan their finances in detail to safeguard against financial uncertainties. This includes ensuring that, in your absence, your family is financially protected and can pay their bills without hampering their standard of living. One of the best and simplest ways to begin this is by purchasing a term insurance plan .Keep reading this blog to have a clear idea of what financial planning is, the importance of a term insurance policy, and reasons to start financial planning with a term insurance plan.What is Financial Planning?Financial planning is the method of organising your expenses according to your income today to safeguard your and your family’s future. You must thoroughly analyse and understand your financial obligations to carry out systematic financial planning and reach your goals. Here are some essential factors which you can consider while carrying out financial planning:Create Financial ObjectivesTo avoid overspending on a particular activity, you need to have clear financial goals and objectives. You must also clearly understand how much you need for education, healthcare, retirement, real estate, and emergencies.2.Monitor Your ExpensesMonitoring your expenses will help you track your spending on each item, cut off overspending, and save for the future.Assess your Net WorthAssessing your net worth and assets is crucial for effective investment planning. It involves calculating the total value of your assets and subtracting the debts you owe (liabilities). This gives you an overall view of your financial situation and lets you make wise decisions about saving, investing, and even insurance.Importance of a Term Insurance Policy to Get Tax BenefitsTerm insurance premiums are tax deductible up to ₹1.5 lakh per year under Section 80C of the Income Tax Act in India, which lowers taxable income. Furthermore, the sum assured received by beneficiaries upon the policyholder’s demise is often tax-free under Section 10(10D), providing a sizable financial cushion to family members. Overall, term insurance is a crucial component of a healthy financial plan as it protects loved ones in unexpected circumstances and increases tax efficiency.Reasons for Starting Financial Planning with Term Insurance PlansHere are the major reasons why you should consider buying a term insurance policy:1.Achieve Your Financial GoalsWhen you start your financial planning, you need to consider your long-term future goals as well as your loved ones' requirements. Getting a term insurance policy is a smart financial move because it helps you protect your family against unexpected losses. In your absence, they can rely on the financial security provided by the plan, ensuring they can manage their finances with confidence.2.Get Life Cover with an Affordable PremiumTerm insurance is the cheapest way of securing the future of your loved ones. Since it only covers you for a limited term and does not earn any cash value, the premiums are relatively lower than other types of life insurance. Therefore, as a product, term life becomes ideal for those who want to protect their loved ones without straining their budget.Customisable and Flexible Policy PlansA term insurance plan is flexible and customisable as per your financial needs. You can easily change the coverage amount to meet your requirements. Also, you can choose whether you want a monthly payout or a lump sum amount.Add RidersTerm insurance riders are add-on or provision options that can be added to the basic term life insurance policy to enrich or modify the coverage. Some typical riders that you may add to your term insurance policy are Accidental Death Benefit Rider, Critical Illness Rider, Waiver of Premium Rider, Terminal Illness Rider, Return of Premium Rider, Disability Income Rider, and Long-Term Care Rider.Final ThoughtsTerm insurance forms an important part of financial planning today. It not only safeguards your family's future at a very affordable rate but also gives you and your loved ones peace of mind. With customisable coverage options and the ability to add valuable riders such as the Accidental Death Benefit Rider and Critical Illness Rider, term insurance can be personalised to meet your specific needs.

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