Life insurance is a reliable financial tool that ensures financial security both for yourself and your dependent family members, even during rainy days. Ideally, it is best to invest in life insurance as early as possible, especially if you maintain a large family who are financially dependent on you.
Purchasing a life plan early will help you enjoy extensive coverage at considerably lower premium rates, which remains locked and unaltered throughout the term.
Moreover, this allows you to enjoy your peace of mind knowing that your dependent family members will not lose their financial security even after your demise.
Why purchase life insurance early?
You can utilise the benefits of your investment to the fullest if you buy life insurance early. Buying life insurance early has several benefits, especially if you are the sole breadwinner in the family.
- Low premiums:
The premiums of any life insurance product are directly related to age and health. The younger you are, it is expected that you are. With this concept, the insurers expect that the associated risks will remain lower, thereby keeping the premium rates comparatively lower. This premium rate remains locked throughout the term, allowing you to enjoy extensive coverage at comparatively lower costs.
- Longer coverage:
If you begin early, it ensures that you can enjoy the insurance protection for a longer duration, expectedly covering several prominent events, like family expansion, buying new property, etc.
- Peace of mind:
The knowledge of a secured financial future for your dependent family members allows a different kind of peace. So, it is best to enjoy this peace as early in life as possible, when your responsibilities remain comparatively lower.
- Locked rates of premium:
If you buy life insurance early, it is assured that the premium payable rates are locked at a comparatively lower rate that remains unaltered throughout the term.
Who should consider buying life insurance?
Life insurance is a very essential financial tool that ensures future financial security. However, it proves to be more essential for:
- Individuals with dependent(s):
If you have members in your family who rely on you financially, then you must consider buying life insurance.
- Couples with a mortgage:
Having a life insurance cover ensures that your mortgage is paid off even if your partner has passed away.
- Individuals with outstanding loans and debts:
If you maintain any loans or debts, like home loans, student loans, credit cards, etc. you must consider purchasing a life plan as its proceeds will help you to repay them.
- Long-term financial targets:
Life insurance investment ensures that your long-term financial targets are fulfilled, like funding your children’s education, marriage, post-retirement planning, etc.
When is the correct time to buy life insurance?
The correct time for purchasing a life policy is when you realise that there a family member who rely on your financial income. If you happen to be the only earning member in your family, then buying life insurance should be your chief priority. This is because life insurance acts as a protection shield and a reliable safety net.
Moreover, you must also consider your age and health before buying life cover. Increasing age increases health issues manifold, which eventually enhances the life insurance rate.
So, it is best to buy early while you are still healthy and enjoy the benefits fully at a comparatively lower rate.
When should you buy life insurance?
To cut the long story short, the answer is at your earliest. Since you do not wait for an accident to happen before buying motor insurance, why gamble with your precious life? Begin as early as possible.
Your premiums get locked at lower rates if you buy early, implying that even if you develop any health issues in your future, you do not need to increase the premium rate.
Consider your health, age, financial status, dependents, etc., before buying a life plan.
Best age to purchase insurance
Term plans are popular life insurance products allowing coverage for a stipulated period, usually ranging between 10 and 30 years. Ideally, you must choose to invest in this genre while you are still young and healthy, and your familial responsibilities are relatively lower.
Factors to consider
Buying life insurance is not a matter of a joke and requires careful consideration. Some significant factors that you need to consider here include:
- Coverage amount:
The coverage amount must be sufficient to fit the evolving financial requirements for your family to maintain the standards. It depends on your financial obligations, targets, and other relevant circumstances.
- Policy type:
Term plans offer coverage for a stipulated duration, while life insurance offers lifetime coverage. Consider your circumstances well before planning and proceed accordingly.
- Riders:
You can enhance the coverage extent of the basic plan by adding suitable riders in exchange for additional premiums.
- Tax saving:
Insurance as a tax-saving instrument is also a great financial tool. As per the provisions of the IT Act Section 80C and 10 (10D), life insurance and term plans allow tax benefits.
Conclusion
The Indian insurance market offers various forms of life insurance products like term plans, ULIPs, whole life plans, etc. Critically consider your circumstances well before finalising your choice.
Also Read: Increase in Life Insurance Applications in March: What It Means for You
