Term insurance plans offer unmatched financial security to your family in case of any mishappening. Because, these plans are available at the most affordable premium rates, you get the optimal coverage on your life.
This optimal coverage provides your family with the much needed financial security in case of your untimely demise. However, despite knowing the importance of a term plan, most of the people delay buying it. When people are young, they take death as a far-fetched idea. Due to this, people generally tend to buy a term insurance late in their live. Is it the right approach to follow?
Definitely not! According to experts, the ideal time to buy a term insurance plan is in your 30s. If you don’t think so, below enlisted are few reasons that will help to change your perception:
1) Most Affordable Insurance Product
If you’ll ever approach a financial planner to help you invest your money, s/he will recommend you to buy term insurance. They have a simple logic behind this:
Though, other investment tools such as mutual funds & pension plans can help you save money for your golden days; term insurance plans help you take care of much bigger risk, which is providing the much-needed financial security to your loved ones in case of your unfortunate and untimely demise.
Your dream to send your kids to the best college, an unpaid loan, financial security for your loved ones – even if you’re not around, the surviving members of your family will have financial support. There are many insurers in India like HDFC term insurance that will help you zero-in on a term plan within your budget to meet the goal of financially securing your family.
2) Starting Early is Equal to Lower Premium Rates
While you’re in your thriving thirties, your body is healthy. Lifestyle diseases such as blood pressure, diabetes haven’t started taking a toll on your body. Other substances like alcohol and smoke have not started showing their adverse effects on your body.
It will lead to two things:
The earlier you buy a term plan; the lower will be your premium amount. For instance, a 28-year-old individual (non-smoker) can buy a term insurance with cover of Rs. 1 crore for as low as Rs. 460 per month. However, the same amount of term insurance cover can cost 3 times more (Rs. 1,380 per month) for a 42-year-old individual (non-smoker).
Before buying a term insurance plan, you need to undergo a medical check-up. An insurance company can decline you a term plan if you have any lifestyle-related disease. As a matter of fact, the chances of this rejection go significantly higher once you cross your 30s.
So, it means that healthy and young = lowest-cost term insurance premium rates!
3) Lock Your Premium Amount
With a health insurance plan, you have to pay increased premium every year when you renew the plan. However, with a term insurance plan, you get to lock your premium.
Therefore, buying a term plan in your 30s means that you get to pay lower premium rates for the rest of your policy tenure. Here’s a simple illustration to help you understand this aspect better:
If you are the breadwinner of your family, chances are that your family will be dependent on you till you reach the age of 65 years as this is about the age limit people generally have loans and liabilities. So, if you are buying a term plan at the age of 30 years, you will need a term cover for the next 35 years.
Anything for a shorter duration than this will not help your family members when they might actually need it. Hence, don’t waste your time waiting till you celebrate your 40th birthday to buy term insurance.
It’s not a hidden fact that we all are always on the look-out for different options to invest and save on our income tax. One of the major advantages of buying a term plans is that the premium paid towards buying a term plan is tax-free u/s 80C of the Income Tax Act. In addition to that, the sum assured given to your nominees also counts as tax-free.
30s are an important threshold of your life and while everyone wishes that anything uncertain would not happen to her/him, life always have its share of surprises to throw-in. In some unexpected cases, these surprises may be not-so-sweet. Therefore, buying a term insurance cover in your 30s is the most responsible thing to do and the best gift for your loved ones.