Purchasing a home, a car, or an up-to-date smartphone is very thrilling. We prepare ourselves, accumulate savings, and also share our homes with friends. However, there is one thing: we often postpone buying insurance. So many young people in India think to themselves, “I am only 20 or 30 years old. I am healthy. Why should I think about life insurance now?”
Actually, it’s easy to think that way. But, at the same time, planning for term insurance at the beginning of life is one of the best financial moves you can make. Today, it’s not only about saving for the future, but also about making your life simpler and less stressful.
Firstly, let’s explain the main term insurance benefits easily so you understand why time is your strongest ally.
1. You Pay the Lowest Amount Possible
Life insurers use your age and health to determine how much you should pay. When you are young, the chance of getting seriously ill is minimal. Since the risk is low, the cost of your insurance plan will be very low as well. That monthly or annual amount you pay is known as a premium.
If you purchase a policy at 25, your premium will be much cheaper than if you bought the same policy at 35 or 45. And best of all, this low price is going to remain with you throughout the period of your policy. You are essentially paying a low rate for life. It is akin to buying a lifetime subscription to your favourite app at a big discount.
2. Your Health is at its Best
Usually, while purchasing an insurance plan, you are asked to fill in the health-related queries, or alternatively, a brief health examination is performed. Generally speaking, as you become young and active, you are unlikely to have health issues such as high blood pressure or diabetes. This is something that insurers really want. Your application will be approved promptly and with no additional cost.
On the other hand, if you are older, small health issues might arise. As a result, the insurer may either increase the price or deny the issuance of the plan. Early purchasing allows you to leverage your good health to secure the best deal.
3. Real Peace of Mind for Your Family
Unfortunately, life is not only good filled with good things; it can also bring bad ones. In case you are the breadwinner of your family, the family members are basically dependent on you. They consist of your parents, spouse, and children.
A term plan is like a safety net in case of an untoward event. The insurer gives a large sum as financial assistance to the family.
The money can be used by the family for:
- Repayment of house loan or car loan.
- Expenses like food, electricity, and rent.
- Support of younger siblings or children to finish their education.
Financial security is something your family deserves. It gives you peace of mind. Without worry, you will be able to focus on work and life.
4. You can pay off your debts
Many young people in India start their jobs with debts. It is possible that you took an education loan to support your studies. Or perhaps you took a loan to buy a bike or even a house. These loans do not just vanish if you are not around. The bank will go after your parents or spouse for the repayment. This can be a disaster for their savings.
Having a proper protection cover with a plan will make sure that your loans do not become a nightmare for your loved ones. The insurance cover can be quickly used to pay off all your loans.
5. Additional Income Tax Savings
Who doesn’t want to save money on taxes? The Indian government wants people to take care of their families so it offers tax incentives to the ones who purchase an insurance policy.
The funds you use for your insurance can result in a smaller income tax bill for you every year. You are allowed to claim a deduction for the premiums paid under Indian tax laws (Section 80C). So, you are paying less tax right now, and at the same time, you are safeguarding your family for their future. It is a win-win situation.
6. You Can Choose Great Add-ons
Keeping your plan for a long time allows you to have the option of upgrading your coverage with extra add-ons, which are also known as riders. They are like getting extra ingredients in a pizza.
For a fairly minor extra amount, you may get:
- Critical Illness Cover in case you get a serious illness such as cancer, this policy immediately pays you a lump sum amount, which you can use for your hospital expenses.
- Accidental Disability Cover if an accident leaves you not working anymore, this policy helps you with financial support.
When you are young and extra money can be spared, these options can be bought easily and are quite cheap.
Conclusion
A term plan is not a luxury item for rich people only. It is a financial instrument that can be used by anyone. The biggest error you can make is to keep waiting for the “perfect time” to purchase it. The perfect time is now, while you are young and healthy. Once you take the step today, you use less money, get better benefits, and build a strong security net for the ones you care about the most.
Don’t put it off until tomorrow. You can talk to a financial advisor or search for the options online today. Your later self will be grateful to you for this.
