Your financial stability directly determines the quality of your life. While you thrive to give the best life to your loved ones, it is important to ensure they are protected in your absence too. Being the breadwinner of your family, it is your responsibility to safeguard their present and future. A life insurance cover provides the financial cushion your loved ones will need in your absence. Term insurance is one such life insurance policy that will give your family the financial aid that it needs.
When should you buy term insurance?
One is eligible to buy a term plan between the age of 18 years to 65 years. 65 years is the term insurance age limit. Even at 65, you can opt for coverage up to 99 years of age. While there is no right age to buy term insurance, the earlier you purchase, the better. In the early stage of your life, getting a term plan might be the last thing on your mind. With little to no responsibilities, there is no such pressure to secure the future. However, the responsible thing to do is start your financial planning early. You are never too early to buy term insurance.
What are the perks of purchasing a term plan early?
As soon as you make your own money, it is important to take financial decisions into consideration. This includes securing your life with term insurance. Here are some benefits of purchasing term insurance plans early –
A low amount of premium
Your age is a crucial factor in determining your premium. The earlier the age, the lower the premium you pay. The premium account of your policy increases as you age. There are several term insurance premium calculators online where you can check the premium you need to pay for the same cover at different ages. The premium is always lower in your 20s, as you are a young and healthy individual.
A financial cover for your loved ones
While in the early stages of life, people worry little about the financial condition of their family in their absence. However, it is always better to plan in advance for the worst-case scenario. In an unforeseen event where you are no longer with your loved ones, term insurance will provide the essential financial cover to your family.
Tax benefits
Term insurance plans help you save taxes while protecting your family. Section 80 (C) of the Income Tax Act of 1961 exempts premium value of up to 1.5 lakhs paid towards a term policy. Hence, buying insurance helps in saving money.
Long-term protection
It is never too early to create financial security for protecting your family. At an early age, you may not pay much premium, but you will still be creating a financial cushion for your family. The nominal premium you pay early on will help in providing security to your loved ones in the long run.
How is your term insurance premium estimated?
There are a few factors insurance companies take into consideration while drafting a term insurance. They are –
Sum assured – The higher the sum assured, the more premium you pay.
Age – The lower the age, the lower the premium.
Lifestyle – The insurance company considers your lifestyle and habits while calculating your premium. Everyday smoking and drinking increase the amount on your term insurance premium calculator.
Gender – Few studies project a lower rate of demise in women as compared to men. Many companies offer discounts on premiums for women.
Term – Long durations of a policy require higher premium payouts. The insurers take the term of your policy into consideration while calculating its premium. Several term insurance plans offer a duration between 5 to 40 years or till the age of 99 years. The term insurance age limit for cover is up to 99 years.
A term insurance policy is great for safeguarding your loved ones at an affordable cost. While it is always better to start early, it is never too late to buy term insurance. Whether you are in your 20s or 60s, it is always the right time to insure yourself and protect your loved ones.