Most people in India consider life insurance as an investment that should be made when you are older. But the truth is, the earlier you purchase insurance in life, the higher will be the benefits. Check out this post to know more.
Life is unpredictable, and nobody knows what the future holds. Purchasing a term plan is a smart way to ensure that your loved ones are financially secure after your untimely demise.
Unfortunately, term plans or any other type of life insurance product is considered an investment one should make in the later years of their life. The basic premise of this belief stems from the fact that something untoward is more likely to happen to someone in the later years of their life.
But don’t you think that you are risking the financial stability of your loved ones by delaying the term plan purchase?
Purchasing Term life insurance at an early age will not only bring peace of mind but a host of other advantages too. Here are three reasons why you should purchase a term plan as early in life as possible-
1. Premiums are Lower
One of the primary considerations for the insurer when calculating the premium of your term plan is your age. Just like you, your insurer also knows that one is more likely to suffer from unforeseen circumstances in the later years of their lives.
As you are generally young and healthy in your 20s and 30s, the chances of something unforeseen happening to you are lower. As a result, the premium of a term plan purchased by someone in the 20s-30s is significantly lower than the same plan purchased in 40s-50s. The longer you wait, the more expensive will be the term plan.
2. Tax Benefits from early Age
One of the top benefits of investing in a good term plan, apart from the life coverage, is the tax benefit. Under Section 80C of the IT Act, you can claim a tax deduction of up to Rs. 1.50 lakhs on the premium you pay towards a life insurance policy. If your term plan also has a health-related add-on, you can claim an additional deduction up to Rs. 25,000 under Section 80D.
By purchasing a term plan when you are still young, you get to start taking advantage of these tax benefits from an early age. In the longer run, this can help you save a significant amount of money in tax payments.
3. Financial Protection for Dependents
If you are contributing towards the expenses of your household, your absence could result in financial hardship for your family. In case if you are currently repaying a loan, your dependents will be left with the liability on your unexpected demise.
A simple and affordable way to avoid this catastrophe is purchasing term insurance as early in life as possible. Even though life is unpredictable, we can at least prepare ourselves for the worst. A term plan can be one of the most vital purchases if you are concerned about the financial well-being of your family.
Purchasing a Term Plan When You Are Young
When you are in your 20s-30s, you are focused on professional success and starting a family of your own. Insurance is not something that people in this age group generally think about. But as you can see, there are several benefits that you can experience by purchasing a term plan early in life.
It will help you save a lot of money in premiums, provide tax benefits, and most importantly, offer a sense of relief and confidence knowing that the financial future of your family is secure.