During the early days of your professional journey, a proactive approach always helps to achieve your goals.
Term insurance is one such option to gain financial security during the initial stages of your life. By taking proactive decisions for your finances, you can secure not just your but also your loved ones’ future.
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Term insurance offers life coverage for a specified duration, such as 10, 15, 25 years, or more. If the insured person dies during the policy tenure, then a death benefit is paid to the nominees. As the insured person, if you outlive the policy term, the insurer will not provide the said benefit.
Why you should get term insurance early
Let us find out why exploring term insurance plans at an early age is a smart move:
1. Cost-effective premiums
Insurance premiums tend to be lower when you are young and healthy. As a young individual, you are less likely to have health problems, so the cost of insuring may also be less. However, buying an insurance plan quite later in your life typically entails higher premiums. By locking in a term plan at an early age, you can take advantage of lower premiums throughout the duration of your policy. Also, you may secure substantial coverage at an affordable cost without straining your budget.
2. Long-term financial security
Obtaining term insurance early on ensures financial protection for a longer period. By having the right coverage in place, you can safeguard your family against potential financial burdens for the longest possible period.
3. Coverage during significant life events
Life is full of important milestones, whether you are starting a family or purchasing a house. Getting term insurance ensures your financial security during these crucial stages of life. As responsibilities increase, so does the need for financial protection. Having a term insurance plan provides a sense of security.
4. Future uncertainty
Health issues tend to arise when you’re older, making it challenging to obtain insurance later in life. When your health is in good condition, passing the underwriting process and getting insurance is relatively easier.
5. Build cash reserves
While term plans primarily focus on death benefits, certain plans offer return of premium (ROP) options. An ROP plan provides a refund of the premiums paid upon surviving the policy tenure with life cover as a maturity benefit. You can create an additional financial asset over time by opting for an ROP plan.
6. Tax benefits
Along with financial security, term insurance plans allow you to take advantage of the tax benefits as well. It offers tax-exemption benefits under the scope of section 80C of the Income Tax Act, 1961. A term plan can help reduce your tax liabilities, allowing you to save more money.
Moreover, Section 10 (10D) of the Income Tax Act, 1961 exempts the nominee from any tax deductions for the sum received as a death benefit. Tax exemptions under this section have no maximum limit.
7. Flexible policy options
The best term insurance plans in India come with policy customisation, with additional benefits that you can choose according to your needs. You can decide the policy term, coverage amount, and additional riders to cover any future mishappening, like accidental disability or loss of income.
To conclude, life is uncertain, you never know what will happen. Therefore, it is better to stay prepared than to suffer. Having a term plan provides a sense of security so that you can focus on enjoying life and achieving your goals.
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