Advantages of Buying Life Insurance Plan at Early Age
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People in their 20’s generally refrain from adopting life insurance plans as they are young, healthy, and have limited responsibilities. They prefer saving money or investing in the stock market for higher returns rather than adopting life insurance. But life insurance can be highly beneficial and economical when it is bought at an early age. A life insurance plan renders financial benefits for the family member of the insured in case of eventualities and it pays for future liabilities if the insurer is not around.
Also Read:- How Much Term Life Insurance Cover Do I Need?
Advantages of Buying Life Insurance at an Early Age
Buying life insurance at an early age has several monetary benefits, apart from rendering absolute peace of mind for the insurer to be saving for his family. Its inherent benefits are:
1. Lower Premiums
The life insurance premiums are very less when bought at an early age. Factors such as the age of the applicant and his general health condition are considered before determining the premium. Thus, young age insurers are imposed with lower premiums to pay. As age advances, the risk of the individual developing health problems is greater and thus the premiums levied on aged insurers are greater.
2. Helps Build Cash Value
By adopting a whole life insurance plan, it is possible to enjoy both life cover and bonuses from the accumulated cash value. With a whole life insurance plan, it will be possible to draw interest over the premiums that have been paid for a longer period. These plans also serve as a prospective retirement income, when invested at an early age.
3. Benefits for Family Members
Buying life insurance at an early age translates as rendering protecting the family from an early age. There could be nothing devastating as losing a breadwinner at an early age and the insured amount can be of much help in rendering financial support for the ailing family.
4. Tax Benefits
Apart from the monetary relief benefits of life insurance at an early age, there are tax benefits as well. The premium paid in the financial year towards life insurance will be covered under section 80 C of the Income Tax Act. This benefit can be claimed for premiums up to Rs. 1.5 Lakh in every financial year. It lowers the tax liability of the person and they can get relief from the tax burden right from their early earning years.
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Take Away
Some of the insurance agencies allow an individual to invest in a life insurance plan as soon as they turn 18 years of age. And there are several insurance plans such as term life insurance, whole life insurance, endowment plans, etc., all rendering the above advantages for the insured. Insurers can choose the plan according to their financial objectives but make sure to take a smart financial move at an early age.
