That’s why it’s essential to secure the financial well-being of ourselves and our loved ones by purchasing a life insurance policy. Among the various types of life insurance, a term insurance policy is considered the most straightforward and cost-effective option.
It provides a high life cover at a relatively low premium for a specific period, typically ranging from 5 to 30 years. While many people may think that buying a term plan is something to consider later in life, the truth is that early purchase of a term insurance is useful in numerous ways. This article will discuss the advantages of buying a term life insurance plan early in life and why it’s a wise financial decision.
Also, when you buy a term life insurance online, the entire process is easy and convenient.
What is Term Insurance?
A term life insurance policy provides coverage for a specified period, typically ranging from 5 to 30 years. In addition, it pays a death benefit to the nominee in case of unfortunate death during the policy term. People who want to secure their family’s financial future at an affordable cost buy a term plan as early as possible.
Let’s take an example to understand term insurance better. Suppose Rahul, a 30-year-old software engineer, buys a 1 crore term insurance policy with an assured amount of ₹1 crore and a policy term of 20 years. The premium for the policy is ₹8,000 per annum, which he pays every year for the next 20 years.
Suppose Rahul dies during the policy term due to an unforeseen event. In that case, his nominee will receive a benefit of1 crore, which they can use to pay off any outstanding debts, meet day-to-day expenses, pay for their child’s education, or any other financial requirements.
On the other hand, if Rahul survives the policy term, he will not receive any payout from the insurance company. However, he would have had peace of mind knowing that his family is financially secure in case of his unfortunate demise.
Now let us understand the benefits of term insurance when you buy the plan early in life.
Premiums are more affordable.
Younger individuals are generally healthier and have a lower risk of developing severe health conditions that may lead to death. As a result, insurance companies offer lower premiums to younger policyholders. The importance of premiums is that they are fixed for the entire duration of the insurance policy.
Hence, if you purchase term insurance at a young age, you will pay a lower total premium than someone older who buys the same coverage later in life.
With a Tata AIA term policy, you can calculate your premiums and enjoy affordable premium rates if you purchase a policy early in life.
Longer Term of Policy
Younger individuals can purchase term insurance policies with longer terms, which means that the policy is active for an extended period of at least 35-40 years. As a result, the premium payments are spread over a longer policy tenure, making them even more afforable.
Increase coverage with fewer restrictions.
Purchasing life insurance at an early age can often result in being able to opt for a higher sum assured or life cover due to fewer underwriting regulations. Not only are the life insurance premiums low but also you can choose a high sum assured since you are healthy and free from potential health risks related to ageing.
Lower premium cost leads to more investment opportunities.
Lower premium costs can help you save money that you can use to explore other investment opportunities. When insurance premiums are lower, individuals have more disposable income. As a result, one may be able to earn better returns on their investments by investing the extra money they save on premiums, resulting in higher long-term financial gains.
In addition, the earlier one starts investing, the more time their investments have to grow, which can lead to significant wealth accumulation over time.
In conclusion, purchasing a term plan early in life can provide secure your family’s financial future with the term insurance benefit. Lower premiums also mean more investment opportunities, leading to higher long-term economic gains and a more robust financial cushion for you and your loved ones. So don’t wait until it’s too late.