Akash, aged 22 year, has started working in a digital marketing company with a good pay. He is so excited that he has started earning and has created a to-do list in coming three years. He wants to go on a trip with his friends, he wants to buy expensive laptops, mobile phones along with a bike. But there is one thing which is missing from Akash to-do list, that is buying a term insurance plan. the reason behind this is that he finds financial planning topics very boring and that is the reason he is least interested. After some years akash buys a term insurance plan with a good cover. But, Akash could have easily saved some money with his appropriate financial planning. Let us see some benefits of buying term plan at early age.
- Less Premium : Term insurance premium is basically calculated on 3 factors. Age of life assured ,Gender of life assured and whether Life assured is smoker/non smoker. Most of the people buy term plan when there dependency increases i.e after marriage. Due to this decision, they have to pay high premium because Premium rate of life assured varies according to age. As age increases, premium rates also increases. So, it’s better to buy policy as early as possible. There is not any dedicated age of buying term plan,but once you start earning it would be best if it is on top priority.
- Less chance of Loading : As per current lifestyles many people gets suffer from various kind of health issue. If life assured has some pre-existing disease like diabetes,asthma then his premium will eventually increase. This rise in premium is due to Extra mortality rate. There is rare chances of person getting such disease at early age, so it is best decision to buy term plans early.
- Protecting Family from young age : Life is too unpredictable nowadays. Whether you are single or married, if you are contributing financially to your family, it would be tough for them to maintain same standard in case of your absence. We all have opted some kind of loan for our purpose, be it car loan, education loan ,etc, dealing with such debts will create additional burden for family. So, it is great decision to buy term plans early.
- Tax Saving : There are various ways through which a person can save tax. one such way is buying a life insurance policy. A person who buys life insurance policy gets tax benefit based on his premium. As per Section 80C ,Premium paid by life assured up to 1,50,000 is eligible for tax deduction
- Rider benefits : Riders are additional benefit on polices provided life assured has to pay additional premium unless it is an inbuilt rider. There are riders like Accidental Death benefit, Disability,Waiver of premium,etc . In Accidental death benefit rider,a life assured gets extra benefit in case of death due to accident. In disability rider, A life assured gets benefit if unfortunately he gets Disabled. Rider premiums also depend on age of life assured. So, for paying less premium of rider it is advisable to get this policy as early as possible.
- peace of mind : It reduces our stress by indicating that our family can live a better life in case of our absence. A person should cover himself for maximum Policy term and Higher Sum assured (at-least 10 times of his Annual premium) to buy peace of mind.
- Higher Sum at Risk : The best thing about term plan is that premium is cheaper and Sum assured is High. It is only in term plan that Sum at risk taken by insurer is huge. Sum at risk is Difference between Sum Assured and Premium paid. For Ex, You took a policy of Sum assured 75 lakh and paid Annual premium of 8,000. Now, Sum at risk is difference between 75 lakh and 8000 that stands to 74,92,000. Overall, It provides each and every insured a maximum benefit with least money.
This article is not sponsored and not meant for endorsing any particular insurance company. Please Check Terms and Condition of respective organization along with inclusion and exclusion before buying insurance policy.