Term insurance is an essential ideal part of your investment portfolio especially for the middle-class section of the society. A Term plan in your investment kitty ensures maximum financial blanket to your family in case anything unfortunate happens to you. The best time to buy a cover plan term insurance would be when you’re young. It’s the protection you and your family need to survive the many ups and downs of life. These plans are straightforward simple plans wherein an insured can purchase a policy up to a certain amount and the insurer will commit to paying the cover amount to the beneficiaries after his or her uncertain death.
Here are few reasons why you should buy term cover at a younger age:
Premium increases with Age
When a person is younger he or she is healthier and fit to earn more money. But as you gradually get older you tend to succumb to critical illnesses such as diabetes, cancer, etc. as well as lifestyle induced diseases. This will tend to creates a more life threatening risk which will increase your premium amount. Therefore, it is important you purchase insurance at an earlier age. It will also help you offer get a higher more coverage amount.
Protection
If you’re a single breadwinner in your family then your absence can will seriously impact the financial situation of your family. Your dependents – be it your parents, your spouse, or your children – will have to face the brunt of paying off the household expenses, education loans, existing debts and more. This might seriously ruin the career of your siblings and children. Spouse or parents will have to face financial hardships. Therefore, if you have dependents then immediate sourcing of financial security is required and hence you should opt for insurance cover as early as possible.
At the younger age, you’re free from any form of a financial burden. You can contribute more towards the premium and produce a greater financial cover for your family’s secured future. Later on when your kick start your family life, you can vary modify the coverage needs as per their financial requirements.
A term insurance avoids the feeling of being under-insured at any point of time. It helps you get a peace of mind that if anything unfortunate happens to you then there is a financial security being fenced across your family wellbeing.
One more benefit of a term plan is that the premium that you pay towards the policy give tax benefit of up to Rs 1, 50, 000 under section 80© of the Income Tax Act. Thus, it helps you save additional amount from being axed by government tax. The sum assured to your loved ones are also exempted from tax under section 10(10)D, provided your annual premium is less than 10% of the sum assured.
A term plan is the simplest form of insurance policy that offers best financial cover for the family. It is essential you purchase the plan as soon as possible so that you reap the benefits of comprehensive protection + tax savings at affordable premium costs.
By evaluating your liabilities and current household expenditure, come reach at a ballpark figure stating to know how much cover you may require. Not to forget your existing lifestyle habits and status after paying off the debts also needs to be maintained considered. Eligibility for term insurance is calculated by your annual income at the time of taking the policy with a relevant factor. You can buy a policy for around 5-30 years and keep decreasing with subsequent age. Eligibility for term insurance is calculated by your annual income at the time of taking the policy with a relevant factor. You can buy more than one term plan.