If you are under the impression that your 30s are the right time to start thinking about an insurance policy, then you need to stop right there. For a term plan, even your twenties are a great time to get the policy. Wondering why? Here’s outlining all the reasons for you.
Lower premiums received at a young age
You can calculate term insurance premium and see that it is one of the most affordable insurance options out there. You can get even lower premiums when you are starting young.
At this point, you are in the pink of health and probably have just joined the workforce as well. Thus, your premiums will be a lot lower than someone who is older, closer to the age of retirement, and has a number of pre-existing diseases. Think of getting the policy early as a way to lower your insurance premiums.
Calculate term insurance premium and extend the term
Your twenties are also the best time to buy an insurance policy because it offers your family financial protection for an extended duration. You can choose a long policy tenure of around twenty-five years and get peace of mind for the longest time.
Also, the fact that you can choose such an extended term means that your monthly premiums are reduced. Thus, starting early on a term plan is also a way to make the insurance as affordable as possible.
Financial protection for your loved ones in your absence
When you are in your twenties, the family may not be financially dependent on you. However, they are dependent on you in some cases. Also, you are going to get married in a few years and have dependents at that point.
You can be assured that your family has the financial security even in your absence. Also, you have the peace of mind that your current debts from EMIs can be paid off from the insurance money in your absence.
The facility of riders to make the plan even more attractive
Riders are the additions that you can make to your current term plan to increase its effectiveness and returns. There are a host of riders available for all term plans in the market.
These riders increase the insurance premium only marginally, but the benefits are extended considerably. For instance, if you take the premium waiver rider, then you can get the premiums waived off in case of a loss of income due to an accident.
The lucrative tax benefits of the policy
Since you have recently started earning or are about to join the workforce, now is a good time to develop an understanding of taxes. According to Section 80C of the Income Tax Act, 1961, all the premiums you pay for the term plan receive tax exemptions up to ₹1.5 Lakh. Thus, if the aim is to save taxes down the line, then a term plan can be a great tool in your portfolio. Along with all the other benefits, it also helps you save on taxes.
Of course, term plans can be bought at any age – be it in your thirties or even in your forties. But if you have a choice, then do not wait for that long. Get a term plan in your twenties and start early to get the maximum benefits.
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