Does it make sense to buy term insurance for the family before you turn 30?


As soon as most of us start making money in our twenties, we young people, whether millennials or gen Zs, are bombarded with not one or two, but Tons of financial advice from our friends, family and colleagues, right?

But what about our motto YOLO (You only live once)? How can we start implementing tons of tips when we want to enjoy the new wings of independence first?

Although it is natural to think so, One tip you can’t afford to ignore is to insure your family with term life insurance.


I’m sure this pandemic has been a big enough wake-up call for us to realize that uncertainty is the only uncertainty in life, to the right?

So how to live peacefully when the risk of leaving our loved ones in a situation of financial fragility in our absence awaits us? How can we let our family’s financial life be compromised in the event of an untimely demise?

Covid has shed light on the importance of life insurance

That’s exactly why it makes sense to get the right term insurance early in your career.

Assuming that most of us young people tend to start making money either after graduating around the age of 21-22 or after graduating around the age of 24-25 years old, we should ideally aim to take out term insurance as soon as possible, at least before we reach 30 and/or take other steps towards more responsibility in life.

Read also : Term insurance premiums to pinch you sooner – Here’s what to do

Benefits of buying term insurance early on

Why You Should Get Term Insurance ASAP

1. The earlier you buy, the lower your premium!

If you’re one of those procrastinating on this decision to get term life insurance or it’s at the bottom of your priority list, then pause, hit the refresh button in your mind and read this.

The biggest advantage of getting term insurance as soon as possible is the low premium!

Simply put, the earlier you buy it, the lower your premium will be. Whereas the longer you delay, the higher the premium you end up paying. This is mainly because at a younger age you are likely to be at a lower risk of health problems, which lowers the risk to the insurance company.

In addition, young people are expected to opt for longer policy coverage and premium payment duration, which in itself means more revenue for insurers, thus leading to cheaper premiums for young policyholders.

Click here know the factors that affect your term life insurance premium.

2. Lock in the low premium for the life of the policy

Once you have purchased a term policy, the premium amount is locked in for the duration of the policy, whether for 10 years, 20 years or even 50 years. So buying term insurance involves early save a large sum of money over a period of time!

Get a lower premium for term insurance by enrolling early

For example, a 25-year-old Delhi-based female (non-tobacco user) can get coverage for ₹50 lakh by insuring her till the age of 60, at an annual premium of around ₹4,000. So for the duration of the policy and the payment term of 35 years, you pay around ₹1.40 lakh as the premium for this ₹50 lakh insurance cover. While a 35 year old man would have to pay nearly ₹6,000 per year for the same amount of cover for the same term of the next 35 years i.e. till the age of 70 i.e. a total of around ₹2.1 lakh.

So, to be covered for the same term of 35 years and the same coverage of ₹50 lakh, whoever buys it earlier pays a lower premium and also saves on the total premium paid!

Now, Since the amount of your coverage depends on your annual income, you might think that you would end up with less coverage if you take out a term insurance policy early in your career, when you are likely to have an income. relatively lower.

Here it is important to remember that not only will you have to pay a higher premium the longer you delay, but also that to get higher coverage based on an increase in income in subsequent years, you have the option of opting for a coverage term plan increasing in which the insurance coverage continues to increase each year or at certain intervals or stages of life, or change to another term insurance later with higher coverage when eligible.

Read also : Why insurance companies insist on a mandatory waiting period for recovered Covid applicants

3. Release the stress of securing the family’s financial future early

Benefits of buying term insurance before you turn 30

The sooner you take out term insurance to protect your family’s financial life, the better it will be for your mental health as well, as you will be relieved of the stress of leaving loved ones financially unstable in the event of an untimely death.

While waiting for the “right time” and postponing the term life insurance decision will make your family financially vulnerable, and they may have to deal with financial difficulties, managing daily expenses, education/care child marriage, ongoing NDEs to retirement corpus, etc. .

So. Why not live stress-free by insuring your parents, spouse and/or children as soon as possible under term insurance?. In the event of an unfortunate death, at least this amount of coverage, which should ideally be at least 15 to 20 times your annual income, would help stabilize their financial life in your absence.

Otherwise, they are likely to be under tremendous financial pressure and their financial future could be in jeopardy without the financial relief that term insurance coverage would have given them.

Read also : 7 benefits of buying health insurance right away

4. Enjoy tax benefits on premium payments and a tax-free death benefit

Tax Benefits of Term Insurance

Who doesn’t want to lower their income tax? Surely all taxpayers do. And to entice people to take life insurance seriously and buy it, the government is offering tax benefits on it.

First, payment of term insurance premium may be claimed as a tax deduction under Section 80C of the Income Tax Act, up to the maximum limit of ₹1.5 lakh per fiscal year.

And that’s not all. Under Section 10(10D), the attorney is entitled to this tax benefit when claiming the cover amount in the form of sum insured in the event of expiry of the contract or death of the policyholder. This amount is completely exempt from taxes as soon as the beneficiary receives it.

Last words

Right now, we all have to agree that none of us would ever want our family and loved ones to suffer financially just because we remained reluctant towards the decision to buy term life insurance. adequate in a timely manner, and instead kept postponing it.

If you’re still hesitant or think you should switch to another life insurance product, keep in mind that term insurance offers a high sum insured at low premiums.involves several sum payment options, the option of increasing life coverage and the possibility of including additional benefits.

Additionally, in addition to the tax benefits for you as the policyholder, even the amount of cover received by your dependents/nominees is also fully exempt from tax under Section 10(10) D. With all of this in mind, coupled with the other key benefits of term insurance mentioned in the article, it certainly makes sense to purchase adequate term insurance as early in your life as possible. Or else, all that remains afterwards is regret!

Read also; F(N)AQ: how to prepare financially before starting to invest

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