Term insurance has lower initial premiums in the beginning, so you can afford higher levels of coverage when you’re young. This could be helpful in covering things like mortgage payments.

Term life insurance premiums increase as you age and the policy generally doesn’t offer cash value or paid-up insurance.

If you want insurance protection only, and not a savings and investment product, buy a term life insurance policy.

OTHER BENEFITS OF TAKING INSURANCE

1. Tax Relief:
a. Under Section 80C of Income Tax Act, a portion of premiums paid for life insurance policies are deducted from tax liability. Similarly, exemption is available for Health Insurance Policy premiums.
b. Money paid as claim including Bonus under a life policy is exempted from payment of Income Tax. Under section 10(10D).

2. Encourages Savings: An insurance scheme encourages thrift among individuals. It inculcates the habit of saving compulsorily, unlike other saving instruments, wherein the saved money can be easily withdrawn.
3. The beneficiaries to an insurance claim amount are protected from the claims of creditors by affecting a valid assignment.
4. Life Policies are accepted as a security for a loan. They can also be surrendered for meeting unexpected emergencies.
5. Based on the concept of sharing of losses, the society will benefit as catastrophic losses are spread globally.