6 reasons why you must buy term insurance early on in life

Published on May 26, 2022 06:03 PM IST
Read on to find out what term insurance is.
Term Insurance is a kind of life insurance plan that provides life cover for a prespecified 'term' to the insured.
Term Insurance is a kind of life insurance plan that provides life cover for a prespecified 'term' to the insured.
ByHT Brand Studio

The start of a promising professional journey brings many responsibilities with it. The first one is undoubtedly towards the well-being of your family and loved ones. That includes taking care of their future financial needs and securing them.

Are you a young professional and don't know where to start? You need to hear about Term Insurance.

Read on to find out what term insurance is. Then, we will give you six reasons why you should invest in term insurance early!

WHAT IS TERM INSURANCE?

Term Insurance is a kind of life insurance plan that provides life cover for a prespecified 'term' to the insured. If the policyholder meets an untimely demise, the nominee gets the sum assured. Some companies provide maturity benefits to the policyholder, which means that the insured gets the premium amount back in case the term period ends.

Typically, you should cover for a sum assured amount that is almost 20 times your yearly income. This insurance product is extremely popular, and many people opt for it to secure their family's future, be it their parents or their spouse and kids. But you might ask, as a beginner, why do you need to invest in a term plan right now?

5 REASONS TO BUY TERM INSURANCE EARLY IN LIFE

1. Premiums are low

If you buy a term plan early, you will get it at low premiums. People in their 20s without any underlying health conditions or ailments can buy term insurance at a very affordable price. Individuals who are older and might have certain age-related illnesses will be required to pay higher premiums.

The reason why premiums are important is that once you buy the insurance, the premiums are set for life. They do not change. So for the same coverage, you will need to pay less in total premium paid than someone older than you who decides to opt for a Term Insurance later in life.

To start, you can have your parents as the nominees and then add your spouse and children as the dependents as your family grows. Companies like Edelweiss Tokio Life Insurance offer really affordable term plans that can help you get started with solidifying your family's financial security. They also give you discounts on premiums if you opt for a higher life cover amount.

2. The term is longer

Early buyers of term insurance get longer coverage periods at very low premiums. You can opt for term insurance that covers you for 30 years and go about your professional life paying nominal premiums. You can rest easy with your family's financial future secured for the longest possible time with a life insurance plan in place.

3. You can increase your life cover at a lower cost.

One more advantage of getting term insurance early is that if at any point during your policy tenure you feel the need to increase your life cover, you can do so at a lower cost than what you'll need to pay as an older customer with a term plan. Additionally, you can customize your plan at the point of purchase with the many riders and benefits that the companies provide to make the plan holistic without doling out a large sum of money!

4. You can buy online easily.

Most Insurance companies have comprehensive websites that give extensive details about their term insurance plans. For example, if you go to the Edelweiss Tokio Life Insurance website, you can learn everything about their Zindagi Plus term plan. You can even make them contact you directly by filling in some basic details. Then, they will get back to you with a quote, and you can get started with the process just like that!

5. Lower premiums leave room for other investments in the future.

Of course, if you get a comprehensive Term Plan at a low price, you will have funds left over to make other investments in the future. As your salary/income grows and the premiums stay the same, you will reap the benefits of starting your financial journey early and investing in Term Insurance at the correct time.

6. There are Tax Benefits!

Not to leave out the tax benefits that accompany a term plan. You can avail exceptions on the premiums paid per year, up to 1.5 lac rupees, under section 80C of the Income Tax Act, 1961. Additionally, the sum assured is also tax-free under section 10D. Tax Savings acquires more meaning as you grow professionally and earn more.

So this may give you the impetus to go out and get term insurance right away but wait. But, first, you need to know how to buy the right term insurance to get maximum benefits.

WHAT YOU NEED TO KNOW

While buying term insurance, you need to be mindful of the following things:

- The Right Coverage: Since you are planning for a future contingency, the cover amount that you choose must be adjusted for inflation. The number of people who will rely on that safety net should be taken into account so that you do not leave behind less than what would be required. Typically, you should keep the cover amount at least twenty times your yearly income.

- The Right Policy Term: The tenure that you choose should provide the maximum coverage to all the dependents so that there is no chance of them not being secure in case of your absence.

- The Right Add-Ons: See what the company is providing in addition to the life cover. See what kinds of rider options they give you. Consider how each one of them might make a difference in your life in the future. For example, if you choose the critical illness rider provided by Edelweiss Tokio on their Zindagi Plus Term Plan, you will be exempted from paying any premium if you are diagnosed with a serious illness. The right add-on can make your policy flexible so that it caters specifically to you.

- Claim Settlement Ratio: This is an important piece of research that must be done on your part. Ensure that the claim settlement ratio of the company that you're buying the term insurance from is good so that you know that your family has the highest possible chance of reaping the policy's benefits.

CONCLUSION

That's it! You can now go and get yourself a Term Insurance and start your financial journey by promising security to your loved ones. After all, the guarantee of their well-being can give you an immense amount of peace.

To begin, visit the Edelweiss Tokio Life Insurance website and leave your details. Their comprehensive term plans are the right stepping stones into a secure and worry-free life.

Disclaimer: This article is a paid publication and does not have journalistic/editorial involvement of Hindustan Times. Hindustan Times does not endorse/subscribe to the content(s) of the article/advertisement and/or view(s) expressed herein. Hindustan Times shall not in any manner, be responsible and/or liable in any manner whatsoever for all that is stated in the article and/or also with regard to the view(s), opinion(s), announcement(s), declaration(s), affirmation(s) etc., stated/featured in the same.

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