When it comes to life insurance, you cannot ignore the all-too-relevant term insurance plan. The plan provides unmatched financial security both to you and your family. Because it has the lowest premium rates, you can afford to get the optimal coverage on your life. This optimal coverage gives your family financial security if you were to die prematurely. Thus, a term insurance plan is always recommended by all and sundry. Despite knowing the importance of a term insurance plan, most of you delay buying it. You believe that when you are young the possibility of death is a far-fetched idea. As a result, you buy a plan late in your life. Is it wise?
It is not. Ideally, you should buy a term insurance plan before you turn 30. Do you know why? Here are some reasons for you to reflect upon –
You can ensure financial security for your family in any unplanned contingency
Wise men say that death comes unannounced. They are right. Though you are young and in the prime of your health, you don’t know what awaits you tomorrow. If you were to fall a victim to an accident, can you save yourself? What about an unforeseen or undetected illness which costs you your life? Is your family prepared to deal with such contingencies? Buying young is, therefore, recommended so that you can ensure your family’s security in the face of any unplanned contingencies.
You can get a policy easily
When buying a term insurance plan, your age and medical history plays an important role in determining the coverage and the premium rate. When you are young, you are relatively free from major ailments and have good health. As such, buying a policy becomes very easy. The policy is issued instantly without strict underwriting formalities. You don’t even have to undergo pre-entrance medical check-ups when you buy a policy in your 20s.
Your employer’s sponsored coverage is not enough
One of the primary reasons why many of you delay buying a term insurance plan is because your employer has already covered you under a group term plan. You, therefore, feel that since you already have an employer sponsored insurance coverage you don’t need one of your own. This is a myth. Even though your employer’s group term plan provides you coverage, the quantum is not enough to provide sufficient financial security. Furthermore, the coverage is ensured as long as you are employed with the same employer. When you change jobs, your new employers might not have a group term plan in place. Therefore, having an independent term insurance plan is essential.
You can secure your loans
Have you wondered what would happen if you were to die before paying off your loans? Would your family be able to bear the burden of your liabilities?
There are decreasing term insurance plans in the market which act as loan protection plans. These plans cover your outstanding loan liability and in the event of your death pay off any debt you have. Thus, they protect your family from the burden of your loans. When you buy a decreasing term insurance plan at a younger age, you can secure your loans and ensure their timely repayments.
Buying young ensures lower premiums
This is, perhaps, the best reason of buying a term plan before turning 30. The premium of the plan depends on your age. The younger you buy the lower the premium you are charged. What’s more, this premium, once fixed, does not increase with your age. Thus, when you buy a term plan in your 20s, you get to enjoy lower premium outgoes which increase substantially when you delay your purchase.
You can save tax too
The last and also the most pertinent financial reason of buying early is tax saving. Term insurance plans provide dual tax benefits. The premiums you pay are tax-free under Section 80C and the benefits are also tax-free under Section 10 (10D). So, buying a term plan also lets you do you tax planning along with fulfilling the financial security need.
Now you know why experts advise on buying a term insurance early in life. After all, if experts give you an advice you can be sure that they have substantial reasons behind such advice. So, if you are young, don’t delay buying a term insurance plan. Buy a plan at the earliest and be the early bird that catches the worm.
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