- Date : 24/11/2021
- Read: 3 mins
If you are wondering if buying life insurance is relevant for people of your age, here is what you need to consider.
The importance of life insurance plans can be felt in more ways than you may realise. From availing of life insurance tax benefits to enhancing your financial security to helping your legal heirs pay off any pending debt to putting your children through college - having a life insurance policy can help you in multiple ways.
Life insurance meaning and importance needs to be understood in this context. What is life insurance after all - an assurance that gives your dependents a sense of financial security.
Benefits of life insurance
Here are some reasons why buying life insurance is a worthwhile idea:
- In the event of your demise, your dependents can meet immediate financial needs such as medical bills and funeral costs.
- If you have a mortgage on your home, your untimely death will not leave your family members adrift since a life insurance claim will clear the outstanding loan.
- It has a low-risk factor that ensures that your investment remains stable and can bring timely returns.
- The policy riders benefit you and your family during tough times of serious illness, accident, physical disability, hospitalisation, etc.
- Not to be overlooked are the tax benefits you get with life insurance. The premium paid towards your insurance policy is available as a tax deduction under section 80C. The amount you or your nominee receives as the sum assured, along with the bonus, if any, is also exempt from income tax under section 10(10d). This includes maturity benefits, surrender value and death benefits, as applicable.
- We just saw why life insurance is important. It is true that you may have to pay a higher premium as your age increases. But it is never too late to buy a life insurance plan. The deciding factor should not be your age but the responsibilities you have.
Financially dependent children
Change in social behaviour can be seen in the increasing rate of late marriages and delayed parenthood. Therefore, children may still be financially dependent even though the parents are in their late forties or even fifties. In such cases, financial assurance is a must.
So, buying an insurance plan even at a higher premium won’t be a bad decision. Death is an eventuality we all have to accept, and a life insurance term plan is certain to serve the future needs of your family members.
With the changing work environment and occupational demands in today’s world, retiring at the age of 55 or 60 is no longer a precondition. A number of individuals are working even 10-15 years after the traditional retirement age. So, it shouldn’t seem surprising if someone buys a life insurance plan at the age of 50, although at a higher premium.
For those of you who still have time on your side, the best time to buy life insurance is now. If you buy a term plan when still in your 20s or 30s, you can save a considerable amount in premium and enjoy life cover over a longer time. However, do not forget that the benefits of life insurance policy remain relevant irrespective of your age.