Being an early bird counts: life insurance is not only for older people

TomorrowMakers ™

Being an early bird counts: life insurance is not only for older people

16 March 2015
When you are young, life insurance is probably the last thing on your mind. Most likely, you might have limited responsibilities, no dependents to look after or even any debts.
 
 

Simply put, it might seem like you do not need insurance. However, here are some reasons why it makes sense to get insured early:

  • It can be cheaper if you start early:
    Life Insurance premiums are based on your age and based on the type of policy, they usually remain unchanged for the entire term of the policy. So if you are 25 years old and you buy a policy for 30 years, your premiums will mostly remain the same for the next 30 years. However, if you wait for 10 years and buy a policy at the age of 35, you will pay a higher premium for the entire term of the policy.One can consider investing in life insurance as soon as there are financial liabilities, monetary goals and expenses that one wishes to cover.
  • Your money has more time to grow:
    When it comes to finance, it is better to start young, and life insurance is no different. Starting early might allow your Endowment or Unit Linked Plan portfolios to gain from the power of compounding or from long-term growth in investment portfolios.
  • Tax benefits and bonuses:
    Premiums paid towards life insurance are tax deductible under current income tax rules. In addition, with policies like Endowments, you can gain from regular benefits and bonuses declared by the insurance company.However, there are certain annual limits to these deductions and the benefits can vary as per the provisions of the Income Tax Act. Consult your tax advisor for detailed advice.
  • You might not get insurance later:
    As you grow older, the chances of disease increase. If your health is not at par with the terms of the insurance company, you might not be able to purchase insurance or might get insurance with increased premiums and/or lower cover.
  • Policy loans:
    Sometimes, while paying off a student loan or buying a home, you might need to borrow money. In such cases, you have the option of availing a loan by pledging your life insurance policy. This way, your policy extends living benefits and acts as a financial backup.

Isn%u2019t it wise to apply for insurance while you are healthy and sure of getting covered? (also see our article on: Life insurance types simplified)

 

Quotes of The Day

POLL

 

MOST VIEWED CONTENT

Top 6 factors that affect how Life Insurance premium is calculated

Top 6 factors that affect how Life Insurance premium is calculated

Have you ever wondered why you are asked to pay lesser premium than your friend or family member? To end the confusion, we have prepared a list of factors that affect how life insurance premium is calculated.

4 reasons why Child Plans make good sense

4 reasons why Child Plans make good sense

A glimpse into the features of a Child Plan.

Term Insurance for Dummies

Term Insurance for Dummies

Term Insurance plans are pure protection plans which provide life cover at a nominal cost. These plans are the simplest type of life insurance plans.

Term vs whole life insurance

Term vs whole life insurance

You’ve decided to provide financial security for your family and subscribe to a life insurance policy, but are stuck in the age-old debate – Term or Whole Life insurance?

Switch Options in ULIPs

Switch Options in ULIPs

Switching options in ULIPs, if used wisely, can help you get the most out of your investments.

Maturity benefits: what you need to know when buying insurance

Maturity benefits: what you need to know when buying insurance

Thought life insurance only gives financial support in case something goes wrong? No. It can grow your money too.

Five essential things to consider when choosing a ULIP

Five essential things to consider when choosing a ULIP

Awareness is the first step towards making effective decisions. Appreciating all the nuances of a powerful financial product like a ULIP will help you to decide the perfect plan for you.

boy

We would love to hear from you!

Question, comment or concern? Our contact form is the best way to get in touch. We will respond to you within 5 working days.

NEWSLETTER