5 Reasons Why Buying A Term Insurance Plan At A Young Age Is A Great Idea

Term life insurance is the last thing on our minds when we're in our early or mid-twenties. The typical notion is that since we are young and healthy, we do not require term insurance or have fewer responsibilities, we do not need insurance, and so on. However, contrary to popular assumptions, a term life insurance plan is necessary and advantageous when you purchase it early.

5 Reasons Why Purchasing Term Insurance At A Young Age Is A Great Idea

Here are the five reasons why you should buy a term insurance plan. 

• Low Premiums 

The best reason to acquire term life insurance early is to avoid paying a higher premium. The cost of term life insurance contracts increases dramatically as you get older. Since you are healthier and have fewer responsibilities while younger, insurance companies take these characteristics into account when determining your term life insurance rate. Furthermore, this does not reduce the plan's sum assured, and you still obtain the same coverage level and other plan features for a lower price than older age groups.

• Financial Coverage 

If you wait too long to buy term insurance, you risk leaving your family vulnerable to financial difficulties if you pass away too soon. Even if you are not married, your parents may find it challenging to manage their bills if they are financially dependent on you. Furthermore, if you have a loan such as a vehicle loan, a college loan, or even credit card debt, your family members will be responsible for repaying it. This could put them under even more financial strain. If you buy term life insurance early on, you won't have to worry about it.

• No Rejection Due to Any Pre-Existing Illness

When it comes to pre-existing conditions, Indian insurers are very clear about either not providing coverage or charging a higher price to people who have them. Your odds of having your term policy application refused on health grounds as a person in your 20s with few major health difficulties are essentially negligible.

Must read: What to Consider Before You Select a Term Insurance Plan?    

• Additional Benefits 

Insurers provide younger age groups with additional add-ons/riders such as accidental death benefit, premium waiver, income supplement if you leave your work, and so on. The most significant advantage is that term plans provide a yearly tax benefit under Section 80C of the Income Tax Act, which exempts premium payments up to Rs 1,50,000 per year.

• No Need For a Group Plan Offered by Your Employer 

Employees in most Indian organisations are offered life and health insurance as a bonus in their compensation package. However, if you read the insurance you're being offered, you'll find that it's categorised as a generic 'group plan,' which means it costs the employer less in terms of premium payments while providing you with absolutely no benefits in terms of the coverage amount. You can undoubtedly take advantage of your employer's insurance plan, but having an individual term insurance plan to protect your family's interests is advisable. 

Take Away

Term life insurance is a necessary financial instrument that everyone must purchase. But, if obtaining term life insurance early on means paying less, enjoying tax benefits from the start of your career, and providing coverage for your family sooner, you should definitely take advantage of it. 

Also read: 

Why Are Term Insurance Known As Risk Protection Plans?

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.