Life is uncertain and one way to ensure the financial stability of your loved ones in case of any untoward incident is to avail of a term life insurance cover. Often, youngsters avoid buying a term plan, as they think they do not have too many responsibilities and want to save the premium cost.
Experts recommend that you buy insurance coverage as soon as you start your career. One of the best and affordable ways to avail a higher life cover is to opt for a term life insurance policy.
If you wish to know when is the best time to buy life insurance, here are four reasons why buying a term life insurance plan at an early age is beneficial:
- Helps reduce the premium expense
Often when you are young, you have no health issues. However, the risk of suffering from ailments increases as you age. Therefore, when you buy a term plan at a younger age, you pay a lower premium. Moreover, the premium remains constant during the entire tenure of the policy, which over a longer period results in significant savings. Additionally, once you age and apply for a term insurance policy, the insurers may not approve in case you have a pre-existing condition. Alternatively, the premium may increase significantly as you pose a higher risk due to an existing ailment.
- Provides financial protection to your family
As an earning member, a loss of income due to an unfortunate event may pose financial difficulty for your family. They would have to meet regular financial expenses as well as pay off any home or car loans in your absence. It is also possible that your loved ones may have financial difficulty in sustaining their lifestyle. To protect your family from such situations, it is recommended that you buy a term policy without any delay.
- Offers versatility
As you grow older, your financial goals change as per your life stage. An excellent benefit of term policies is that you may modify the coverage based on your needs at various times. Therefore, a term policy offers flexibility and ensures you do not feel under-insured or over-insured during your life.
- Provides tax benefits
Like most others, you may also want to reduce your tax outflows and a term plan is an excellent way to do this. According to section 80C of the Income Tax Act, 1961 a premium of up to INR 1.5 lakh per annum paid to avail of a term policy is deductible from your total income. Additionally, if something untoward happens to you during the policy duration, the benefits received by your beneficiaries are exempt from taxes as per section 10(10D) of the Act.
Term policies are the simplest forms of pure life cover. Therefore, it is recommended that you buy one without further delay.