Why Must One Purchase a Term Insurance Plan Before 25 Years?
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Purchasing a term life insurance policy at a young age establishes a firm financial foundation that not only assists you in meeting your life goals on time but also protects you from life's uncertainties. Read on to learn why you should buy a term insurance policy before you reach the age of 25 years.
Why Must One Purchase a Term Insurance Plan Before 25 Years?
Here are some reasons to get a term plan when you're young.
1. Cheaper Premiums
A term insurance policy's premiums are usually fixed for the duration of the policy. The premium amount, on the other hand, is decided by a number of factors, including the age at which the insurance is obtained. If you purchase it later in life, the premium for the same money assured will be significantly higher.
2. Fear of Claim Rejection
As we age, we become more susceptible to new medical disorders or diseases. If you wait too long to buy life insurance and develop medical problems, the premium cost will go up even more, and the policy might be rejected based on your condition. To avoid all of this, it's best to begin your insurance trip when you're young when the odds of having medical disorders are lower and the premium cost is also lower.
Also read - Key Points to Consider While Purchasing a Term Insurance Plan
3. Financial Security
If you wait too long to buy life insurance, you could put your family's finances in danger, especially if you are the primary breadwinner. Furthermore, as previously said, purchasing a life plan later in life will cost you significantly more. As a result, getting the relatively cheaper term plans from a young age can provide you with peace of mind.
4. Loan Repayment
The EMIs for your car loan or any other personal loan will be deducted from your income. In the event that something unexpected occurs, your family will be the ones to deal with it. Term insurance would cover your financial obligations when you pass away. While your family is dealing with your loss, the death benefits will help them get out of their financial bind.
5. Save Taxes
Section 80C of the Income Tax Act allows for a tax deduction of up to Rs 1.5 Lakh on premiums paid for life insurance contracts. As a result, term plans provide a good tax-saving opportunity for young people who typically struggle to use the tax benefits available to them. Under Section 10 (10D) of the Income Tax Act, the proceeds received as a death benefit are tax-free as well.
Take Away
Investing in term insurance as a young adult at the outset of your career would be the best move you've ever made. Though death is inescapable, term insurance can provide you with financial security for your family. Getting into a better financial situation before you turn 25 would be a good starting point for your adult life.
You may also like to read - Term Insurance V/S ULIP: Which is Better?
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.
