If You Are Single, These Reasons Confirm Why You Should Buy a Term Plan

In your twenty-somethings, you get your first job and have the first peek into the newly found financial independence. During this period, you mostly fraternize on spending your salary on your desires instead of your needs even though the twenties are the prime time when you should start investing your money for more significant results in the future. Just like seeds need time to turn in to a full-fledged tree. Likewise, financial plans also need time to grow into maximal results. There are two ways in which you can have a solid financial plan, first, by making your money work hard, second, by preparing for the contingencies. 

So, in your twenties, if you wish to sustain your savings and prepare for contingencies, then you should consider buying a term plan. After comparing, you can choose between offline and online term insurance from reputed insurers like Max Insurance. Here are the reasons why you should consider purchasing a term plan while you start with your financial planning: 

• Low Premium

Your age is the most critical factor that determines your rate of premium. When you start investing early, you get the benefit of choosing a term plan with a low premium, since the rate of premium varies with your age. 

For example, a 30-year old male (non-smoker) would have to pay a premium of Rs 4,720 (inclusive GST) for a term insurance cover of Rs. 50 lakhs. On the other hand, a 40-year old male (non-smoker) will have to pay Rs 7,198 (inclusive GST) for the same term insurance coverage. 

As evident, the sum of premium payable increases with age, since insurers correlate higher age with a higher risk of mortality. As term insurance plans do not have any maturity or surrender benefit, you should likely go with a plan that offers the lowest premium, at constant factors such as age, term, and sum assured. Hence, it is important that you secure yourself with adequate life insurance coverage early in your life. 

• Tax Benefits

Term insurance is an integral part of planning for the future of your family members, explicitly if they depend on your income. Even though death is depressing to think about, and no one likes to prepare for the same, the truth is that slight distress now can protect your dear ones a world of financial pressure should the worst happen.

Term insurance is meant to safeguard your dear ones against unforeseen mishaps after you are no more. In such an event, it provides a lump sum death benefit to your nominees, which lets them take care of their desires and goals.

Additionally, if you are looking for a tax-saving investment plan, then term insurance fits in perfectly. It provides the following tax benefits:

• Premiums paid are tax-deductible u/s 80C up to a maximum of 1.5 lakhs in a financial year .
• Death benefits are tax-free.

• Security Net for Your Family 

Another reason why one should go for a term plan is to secure their family’s future by bringing financial stability to pay off the liabilities. A term plan not only provides financial security to your family, but this plan is also capable of fulfilling future needs, such as your child’s high education, child’s marriage, and so much more. 

This is possible since the term plan provides comprehensive financial coverage against premiums paid for a limited period to the beneficiary of the policy. In case upon the demise of the insurer during the policy time, the coverage of the term plan is paid as the death benefit. The bottom line is that even if any mishap happens, your family’s financial security is there, and they continue to live with pride.