Why Should You Purchase A Term Plan Early?
Published On Jul 15, 2021 11:30 AM By InsuranceDekho
Table of Contents
- Reasons Why You Should Purchase Term Insurance Plans Early
In our early or mid 20s, getting term life insurance is the last thing in our mind. The common belief is – being young and healthy, we do not need term insurance; Or since responsibilities are less, we do not need insurance etc. Now, contrary to popular belief, buying term life insurance early is not only important but also beneficial.
Below is a list of the 4 reasons why you should buy term life insurance early in life.
Reasons Why You Should Purchase Term Insurance Plans Early
The of the reasons are as follows:
1. Premium amounts for term insurance policy is low
This is the biggest advantage of buying term life insurance early. As you grow older the premium amount for term life insurance policies increase significantly.
2. As premium amount is locked for life, you pay much less in total
Once you buy a term policy, the premium amount is locked for lifetime, i.e. it remains the same throughout the policy tenure. Hence, buying it early means saving a big amount of money over a period of time. So, buying early means saving more money.
3. Your family and dependents get covered earlier on.
Waiting too long to get term insurance means you are leaving your family vulnerable that if you die early then they would have to face financial hardship. Even if you are not married, if your parents are dependent on you how will they manage their expenses? Plus if you have any loan – automobile loan, student loan or even credit card debt – your family members will have to pay for it. This might put them under more financial pressure. Buying a term life insurance early on means you do not have to worry about it anymore.
4. Enjoy the tax benefit from the initial stage of your career.
The primary reason for buying term insurance is to ensure that your family does not have to go through financial trouble if you are not there. But you also enjoy tax benefits for buying a term plan.
A. Section 80C: Under this section, you can claim tax deduction for the premium amount that you pay for the policy. Section 80C is the biggest tax deduction pool and under this section
B. Section 80D: This exemption is allowed on the premium paid towards health-related coverage like critical illness riders. You can claim deductions up to Rs. 25,000 for the premium paid towards it.
C. Section 10 (10D): The nominee can claim this tax benefit while claiming sum assured in case of the death of the policyholder. The entire amount is completely exempt from taxes.
Term life insurance is an essential financial product that you have to buy at some point – sooner or later. But, if buying term life insurance early on translates to benefits like paying less, enjoying tax benefits from the early stage of your career, cover for your family earlier etc, why miss out on them.
Also read:- How Does a Term Plan Work?
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.