The financial protection of you and your loved ones can be your top priority after you start earning. During your active working years, you might aim to save more for the long-term safety of your family in your absence. According to a report, 80% of the population in India are habitual savers.
Since savings can be your primary goal, you might tend to ignore the benefits of buying a term insurance policy during adulthood. The main objective of a term plan can be to provide financial support to your loved ones after your demise. Apart from financial security, you can reap these top three benefits mentioned below on buying a term insurance policy when you are young:
- Low premium
Premium can be a crucial element of a term insurance policy. Since you can obtain a life cover in return, you should pay the term insurance premium regularly. However, you can decide whether you wish to make the premium payment quarterly, monthly, half-yearly, or annually. When you select a premium payment mode based on your convenience, you should diligently pay the premium to ensure that your term policy does not lapse.
Under term insurance, your insurer can charge you with an affordable premium based on your age, health condition, and so forth. Since you might not suffer from severe health conditions, such as cardiovascular diseases, kidney failure, cancer, and so forth, your insurer can charge you with relatively less premium. In simple terms, the fitter you are, the lower can be your premium.
- Tax benefits
After you start earning, paying your taxes can be an essential part of your lives. Since you might aim to reduce your tax liability, you might choose term insurance due to its tax benefits. Term insurance tax benefits are as following:
As a policyholder, you can be liable to claim a deduction up to Rs. 1,50,000 on your taxable income, according to Section 80C of the Income Tax Act, 1961.
- Death benefit
As the nominees, your family members can receive a tax-free payout in your absence in accordance with Section 10(10D) of the Income Tax Act, 1961.
- Stress-free future
As a young adult, you might not be able to predict your future expenses. Hence, when you are young, you should purchase a term policy to safeguard every stage of your life as well as obtain a coverage to safeguard every stage of your life.
Term insurance can be the right type of insurance product to protect your evolving needs. With a term plan, you can increase or decrease the term coverage when you cross essential milestones, such as getting married, having kids, and so forth. Moreover, the term coverage can let you lead a stress-free future without worrying about the financial safety of the members of your family in your absence.
To sum up, a term plan can be the simplest form of an insurance product. It not only offers maximum term insurance benefits for your safety but also ensures the safety of every member of your family. If you wish to reap the term insurance benefits, you should purchase a term plan at an early stage of life. However, see to it that you select a credible insurance company, compare different types, and choose the right term plan based on your financial requirements.