With financial planning possible at the fingertips and the digitization of finance, millennials and the coming generation is prioritizing a systematic plan for their finances. The information is accessible very easily which is why this decision-making has become easy and quick.
But, despite the awareness, term insurance still takes a back seat regarding finances and investment. Term insurance calculators are available online that help to find out the premium and the cover for the insurance beforehand.
Let us take a look at the benefits of starting your term insurance plan early.
- Financial Safety:
When you are the sole earning member of the family, with you gone the entire family gets affected. This is when the term insurance comes in the favor of the family members. Generally, the sum received is used for any purpose and there is no limitation for the same.
Savings accumulation is a slow process and in desperate times like the demise of the earning member of the family, the lump sum received from the term insurance cover is definitely the greatest boon.
- Affordable Premiums:
Contrary to other investment alternatives, term insurance plans have a very affordable premium. The reason behind the same is the lack of investment perspective in the same. Since the premiums are affordable if you start in your early twenties because there are no health issues at that age.
This can save costs and result in better coverage and a lower premium.
- Fixing the low premium:
Buying a premium at an early age may help you fix the premium amount for say even a period of 20 years.
Significant cost savings are a result of this. There is a vast difference when you buy a premium at the age of 20 versus buying a premium at the age of 30. Over the long term, these cost savings can be invested and the result can be very beneficial. You can check the same using a term insurance calculator.
- Tax Benefits
Under section 80C of the Income Tax Act 1961, there is a provision that allows a deduction of Rs. 1.5 lakhs for the premium paid in a year. This can prove to be an asset as the deduction can provide tax relief from a very young age.
Also, the benefits that are received by families are exempt under Section 10(10D) of the Income Tax Act 1961. This can be availed if your premium is less than 10% of the sum assured.
- Protection to dependents
Believe it or not, the dependents will need the cover provided by term insurance to cope with all the loans that are still pending and the expenses needed to cover the living expenses. With the term insurance coverage, your dependents can be worry-free at least for these major expenses.
- Living stress-free
Predicting financial news is impossible even when you have achieved the milestones of your life. Term insurance covers can be increased or decreased depending upon the needs and life events.
This results in lower stress for you of becoming either over or under-insured at several stages in life.
To conclude
A term plan is one of the simplest insurance vehicles out there. It is advised that you start early so that you can reap the benefits of greater coverage, minimum premiums, and tax benefits. There are online term insurance calculators for reference.
Financial security for your loved ones is a benefit that cannot be replaced in the case of term insurance. Buying term insurance can be daunting at first, but a little bit of research and knowing what is the best alternative for you can help you get through it quite seamlessly.
Term insurance is a type of life insurance that provides coverage for a specific period of time or years.
This type of life insurance provides financial protection to the nominee in case policyholder dies during the policy term.
Term Insurance plans provide high life cover at lower premiums.
For eg: Premium for ₹ 1 Cr Term Insurance cover could be as low as ₹ 490** p.m.
These fixed premiums can be paid at once or at regular intervals for the entire policy term or for a limited period.
Premium amount varies basis the type of the premium payment method opted by the buyer.
