Most people cross their first major milestone around the age of 30 and start a new phase of life. It is the age at which one has chalked out a firm plan for the future and is going to take on new responsibilities in the coming years. Around this time, you may have just gotten a promotion, gotten married, or just had a baby. It is, thus, an ideal time to consider creating a protective financial cover for your loved ones.
A term insurance plan offers a death benefit in case of the death of the life assured. The coverage is availed for a fixed period of time and does not offer any additional benefits such as maturity benefit or survival benefit. Hence, term insurance plans are the simplest and most cost-effective types of life insurance.
Here’s why you should buy a term insurance plan early
Buying a term insurance plan early in life comes with several advantages as explained below:
- Lower Premiums
In your late twenties and early thirties, you are in the pink of health with few or no health issues. Life insurance companies, thus, offer policies at a low premium as the risk associated with you is low. As you grow older, the chances of being diagnosed with lifestyle diseases such as diabetes or obesity increase. Insurers accordingly increase the premium rate for older individuals.
So, the older you are, the higher the chances of you having contracted a disease already or contracting a disease in the near future. Therefore, it is best to get a term insurance plan when you are 30 years old when it costs you less, as opposed to getting it when you are 50 years old.
- Larger sum assured
You are required to pay a certain premium amount towards the policy regularly. You can choose to pay the premium throughout the term of the policy or only for a short period and enjoy coverage for the rest of the term. Since you will have a stable source of income in your early years and may not be suffering from many ailments, the insurer will offer a larger sum assured.
However, if you plan to get a term plan when you are over, say 50 years old, the sum assured amount offered by the company could be a lot lesser.
- Higher chances of approval
Life insurance companies run checks before approving your application. Some companies may even require you to undergo a complete medical examination. The approval will be based on several factors such as your health, your income stability, and so on. If you apply for a term plan when you are still hale and hearty, the chances of approval by the insurance company are much higher.
- Tax benefits
The Indian government encourages individuals to get life insurance coverage so that families have financial backing in times of crises. According to Section 80(C) of the Income Tax Act, 1961, life insurance policyholders can avail a deduction equal to the premium they pay from their taxable income. Additionally, the death benefit offered to the beneficiary is tax exempted.
Almost all life insurance companies offer at least one term insurance plan. Look for a suitable one and purchase it as soon as possible so that you need not be worried about how your family will manage everyday expenses or pay off debts in case of your untimely death. Term insurance plans will, hence, help you lead a stress-free life.