When it comes to ensuring financial protection for your family, you must choose to buy Term Insurance. A term insurance plan pays the sum assured amount to the nominee, in the event of your unfortunate demise during the term of the policy.
Term insurance provides the life cover for a specific ‘term’ of years. If the insured dies while the policy is still active, the death benefit is to be paid. Term insurance offers a cost-effective risk cover, in comparison to other life insurance products. In other words, it offers the assured death benefit to the nominee and helps him/her manage the finances even after the death of the policyholder.
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Reasons to buy Term Insurance at an Early Age
Let’s discuss, why you should buy term insurance at an early age.
1. Premium increases with age
The reason for this is that usually, “the younger; the healthier”. As you grow, you’re at a larger risk of being sick or getting a disease because of the modern and lethargic lifestyle. Thus, if you’re taking a term plan at present, you are considered free of such illness or any commonly known medical issues, wherein waiting a year or a couple of years, causes one to be ending up in a tolerant lifestyle sickness or in crucial ill health. Insurers may reject your policy application altogether or sharply increase your premiums and may apply loading on the grounds of your ‘pre-existing medical condition’.
Considering the scenario of providing only the death cover offered under a term insurance plan, their premiums are cheaper as compared to other insurance plans. In fact, among the rest of the insurance plans, term plans have the least premium. This low premium provides cash security for your family in your absence. Thus a person can buy term insurance as soon as they start earning.
3. Get complete financial security
The comprehensive coverage at low premiums is the key aspect that differentiates term insurance from other life insurance products. The traditional life insurance plans like endowment or money back offer you returns on maturity, however, term plans give you the choice of getting a comprehensive life cover say Rs 1 crore cover at a very affordable price. This will give your family an entire sense of economic security even when you are not around.
4. Save Tax
By buying a term life insurance, you have the option to save on tax. For the premiums paid, you are eligible to receive tax benefits under section 80C. Also, the benefits received by your loved ones in your absence are also tax exempted under section 10(10D).