As a young person with a stable job, you rightly believe that the world is your oyster. But your financial independence needs to be tempered with caution for the future. We’re suggesting that you buy a term plan today.

Why buy term insurance?

Term insurance is a pure life insurance product. It does not have a maturity benefit, i.e. you do not receive any of the premiums you paid if you outlive the policy term. It only has a death benefit which is passed on to your family members.

However, the premiums paid for the term life insurance policy are amongst the most affordable in the life insurance segment. Also, the sum assured is a very high one, which can help your loved ones tide over their future expenses quite comfortably.

Why buy term insurance earlier in life?

As a relatively younger person, you might believe that you don’t need to buy term insurance right away. You feel that you don’t yet have a family to support, so you can afford to wait for a few years to buy term insurance online.

But this is why you should buy term insurance sooner rather than later:

* It is more affordable. Insurance providers in India are happy to extend term insurance to younger age groups, with the added incentive of lower premiums for those in their 20s enjoying a regular income and a healthy lifestyle. Leading providers also lower the premium payable if you buy the term life insurance policy online, to account for lower operational costs and no commissions paid to brokers when you buy the plan directly from the company. The premiums are higher for older age groups, so it is prudent to buy term insurance today rather than in the future.

* You can buy more expensive insurance later, while enjoying coverage today. The term insurance plan gives you life coverage while it is still active, and you might even have company-sponsored insurance. Since the premiums on the term plans are quite low, you can easily invest in one today without thinking too deeply about it. The term plan gives you the freedom to get life coverage today with the liberty to buy a more expensive plan at a later date, if you so wish.

* You can start planning for the future. Buying a term life insurance policy may not help you directly, but it can certainly help you start planning for the future. You might wish to get married, but the thought of not having enough money saved up might stop you from going ahead. But when you buy term insurance online, you can be sure that the insurance money can help your spouse, aged parents and also your children in the future, in your absence.

Published by Inder Singh