A term insurance policy is initiated to provide compensation to the insurer’s family (or nominee) if the insurer dies during the specified term for which the policy is valid. When you compare a term policy with a regular life insurance policy, the key difference is that in the case of normal life insurance, you will receive a fixed sum upon maturity of the policy. Likewise, a health insurance policy or medical policy provides the coverage amount if you get hospitalized during the policy term. If you cannot afford to pay a high premium, term insurance is the best way to ensure the financial security of your family in the event of your premature death. Though there is no maturity benefit, the coverage amount is quite high in proportion to the premium payable. Also, buying a term insurance plan at a young age is a wise idea. Here are 6 important reasons to get term insurance as early as possible:-
1. Low Premium for High Coverage–
When you research and compare term policy (or a medical policy), the insurer’s age is the first factor considered for fixing the premium amount. For the same term plan, a 25-year old will have to pay only a small fraction of what a 40-year old has to pay. Therefore, if you have to invest in a term insurance policy, it is best to begin as soon as you work on your first job.
2. Lesser responsibilities at a young age–
The younger you are, the lesser are your responsibilities, and thus you can afford to invest in a high-yielding term insurance plan. Maybe your first salary is not enough to help you invest in a health insurance plan, but the cost-effective term insurance policies can be easily availed from the very outset.
3. Ease of Enrolment–
If you feel that term insurance comparison and research are aspects you need to worry about only at the later stages of your life, you are sadly mistaken. One of the biggest advantages of availing term insurance early in life is that you don’t have to worry about enrolment hassles. The higher your age, the higher is the possibility of developing a pre-existing ailment. If a pre-existing condition is detected, most insurance service providers will refuse to let you get enrolled for term insurance. In fact, the case with a health insurance plan or a medical policy is similar. The younger and fitter you are, the higher is your probability of getting enrolled hassle-free.
4. Premium amount is fixed for life upon enrolment–
Once you get on board with the term insurance policy at a young age, the low premium amount applicable is locked for the entire tenure of your life. So you don’t have to worry about paying a higher annual premium as you grow older. On the contrary, the premium of any other type of life insurance or health insurance is bound to increase upon your transition from one age bracket to the next one. Since the premium is locked in the case of term insurance, getting it early on would be the smartest financial decision on your part.
5. Tax Benefits–
Yet another reason to go ahead with term insurance comparison, and opting for the right term insurance plan at a young age is the tax benefit. The annual premium amount is exempt from income tax (to an upper limit of 1.5 lakhs) under Section 80C. If the limit has been surpassed due to other investments, there are other tax benefits under Section 80D and 10D as well.
6. Stress Reliever–
It cannot be stressed enough that life is highly unpredictable. Once you have ensured that your family is secure at a young age itself, it can relieve you of the stress of near and dear ones who are completely dependent on you. Also, if you have taken loans, the burden of repaying the same shouldn’t fall on your family. Be it for unpaid loans, your parent’s medical bills, or your children’s education, all of this will be taken care of in the event of your premature death.
Owing to the aforementioned reasons, it is highly advisable that you carry out online term insurance comparison, and enrol yourself for a good term insurance plan at a young age. Starting early is a smart choice, and you will reap its benefits for life!