Top Reasons to Invest in Term Life Insurance Early in Your Life

Reading Time: 4 minutes

Life insurance is often considered an investment that is made later in life, once you’ve grown older. However, this is a mistake, as an unexpected event can occur at any time, threatening the financial well-being of your loved ones. One of the most effective countermeasures is to opt for life insurance early in life. 

But is this the only reason? The answer is no! Keep scrolling to know why availing of life insurance earlier in life can prove beneficial. 

What is a Term Insurance Plan?

A term insurance plan is a life insurance policy that offers coverage for a limited time period, usually 5 years to 30 years. In the event of the insured individual’s death within the policy period, the insurer offers financial coverage to the nominees, which allows them to cover a wide range of expenses. 

Term insurance policies now have lower premiums than other life insurance products. Additionally, they offer a wide range of add-ons that enable individuals to gain coverage for situations like critical illnesses, disabilities due to accidents, etc., that are not included under the base plan.      

When is the Best Time to Invest in an Insurance Policy?

Life insurance products are intended to offer lifetime coverage for you and any family members who may be left behind after your death. Many plans also provide death benefits if you die early as a result of an accident or a life-threatening illness, which can assist in covering funeral fees and other expenditures.

When it comes to timing, buying life insurance when you’re younger will save you money. This is because younger people are eligible for reduced premiums. Furthermore, as you become older, you may develop health issues that make insurance more expensive or prevent you from getting a plan. 

You can also buy term insurance online, where premium payments and tracking are easy. Hence, early insurance purchase is highly recommended. 

Top 10 Reasons for Investing Early in Term Life Insurance?

1. Pay Low Premiums

Purchasing a life insurance policy early can save you money in the long term. The insurer considers the applicant’s age and general health status when determining the premium payable. Another reason buying life insurance at a young age saves money is that your risk of death is substantially lower.

2. Get Good Maturity Benefits

When you get a life insurance plan at a young age, your money has more time to grow. As a result, investing at an early age increases the maturity benefits you will receive if you survive the policy term.

3. Better Family Future

In case you are the only earning member in your family, your untimely demise can leave your family in a very unstable financial position. Thus, having a life insurance plan, especially when you are young and have just started working, will help you save more with lower premiums while having a safety net to take care of your loved ones’ finances in your absence.  

4. Enjoy Tax Benefits

Aside from the benefits listed above, life insurance plans provide tax benefits to investors. Section 80C of the Income Tax Act enables individuals to gain a maximum deduction of ₹1.5 Lakh per financial year on the premiums paid. 

However, these deductions are only available if the total premium paid within a financial year is up to 20% of the sum assured.   

5. Support for Retirement Goals

Many individuals utilize life insurance to enhance their retirement funds. Some life insurance policies provide a steady stream of cash each month. As a result, these policies help you manage your monthly spending even after retirement.

6. Disciplined Investment

If you choose an income cum security plan, such as a unit-linked policy, you have to pay the premium on a monthly or quarterly/annual basis, depending on the chosen frequency. This approach prioritises disciplined investing with a focus on long-term growth. 

7. Peace of Mind

Death is the ultimate reality of existence, and it is unavoidable. Thus, the least you can do to protect your family’s financial future is to purchase a life insurance policy. This also provides peace of mind because you know your family’s protection.

8. Long-term Savings Option

Some life insurance plans, such as whole life insurance, include a cash value component that builds over time. This monetary value is available through loans or withdrawals (subject to policy terms and interest rates). It can be a useful source of funds for crises or long-term financial goals.

9. Flexibility in Selecting Coverage

Life insurance firms provide a variety of plans with varied coverage amounts, terms, and benefits. You can select a plan that meets your needs, budget, and risk tolerance. To gain more flexibility, you can also buy life insurance online.

10. Guaranteed Payout

Unlike stock market investments, which fluctuate in value, life insurance provides a guaranteed payout upon death. This gives your beneficiaries a reliable financial safety net during a tough period.

Investing in life insurance is more than financial security; it expresses love and duty for your family. However, the reality remains that investing in life insurance early has numerous benefits. Once you’ve learned about them, you’ll understand why it’s also an important element of your retirement strategy.

So, check out the life insurance plans offered by your preferred insurer and take the first step towards safeguarding your family’s future.