Commencing investment at an early stage is highly recommended for optimal results. It is recommended to consider various financial opportunities during one’s 20s. Time is a very caring criterion when it comes to investing. A sum of money available today is worth more than the future amount. This is because high inflation erodes the value of money.
You possess high vitality, dynamism, and optimism as a youthful person. This is when you may have recently secured your initial employment and have minimal obligations to fulfill. During this phase, an individual’s life appears free from worries, and they anticipate achieving various significant events. It may not be advisable to purchase term insurance during this particular phase of your life.
In this article, we will present several compelling reasons to encourage a shift in thinking. Purchasing life insurance is a prudent choice that can impact your financial trajectory positively.
Commencing a term insurance plan early will result in a reduced premium payment.
Acquiring a life insurance plan at a younger age can result in lower premium payments than initiating coverage at an older age. Insurance companies consider various factors, such as age and health status, when determining the premiums for term life insurance policies. Younger individuals who are in good health and have fewer obligations may be eligible for lower premiums.
|Premium of term insurance of ₹1 Crore|
Because the premium amount remains fixed throughout the policy’s duration, the total amount paid by the policyholder is significantly reduced.
Upon purchasing a term insurance policy, the premium is fixed for the policyholder’s lifetime. This means that the premium amount will remain constant throughout the policy term. Acquiring an insurance policy at an early stage results in significant cost savings over an extended period.
The coverage for your family and dependents is provided at an earlier stage.
Delaying the purchase of term insurance exposes your family to financial vulnerability in the event of your premature demise. If an individual is unmarried and their parents rely on them for financial support, it is pertinent to consider how the expenses will be managed. If you have an outstanding loan, your family members may be responsible for its repayment. This situation could potentially cause stress for your parents. Purchasing term life insurance early eliminates the need for further concern.
Finally, the following are the three tax benefits that can be obtained from a term plan.
Under Section 80C, it is possible to claim a tax deduction for the premium amount paid towards a policy. The tax deduction pool in question is notable, allowing for a deduction of up to Rs 1.5 for specific investments and purchases.
According to Section 80D, individuals can claim a maximum deduction of RS 25,000. The premium paid towards health-related coverage is eligible for exemption.
By Section 10 (10D), in the event of the policyholder’s demise, the nominee is eligible to receive the tax benefit in conjunction with the sum assured. The entire sum is exempt from taxation.