Term Insurance: Why a 25-year old should get one?
Your 20 is supposed to be the best time of their lives. You are young, healthy, have a steady income and comparatively few obligations. Thoughts such as savings, investments, retirement planning and insurance are not on the horizon of most of you. And this makes it all the harder for most 25-year-olds to accept that they need insurance.
However, getting term insurance at this age has many advantages, the primary one being that one can get more affordable plans. Another advantage is that by beginning early, the policyholder can create a substantial corpus by the time the policy matures. However, some 25-year-olds who run the house might wish to take insurance but are hindered by the fact that their income is inadequate to pay high premiums.
To all 25-year-olds, we say: stop procrastinating and get a term plan. This is why:
Don’t worry about expensive premiums
Term plans are high sum assured whole life policies that have very economical premium rates. The most important point to remember here is that the premiums are inexpensive. This helps a person in his 20s invest in a policy that gives superior life coverage until the time that he can manage to buy a more costly life insurance plan.
Buying a term plan is easy
All reputed insurance companies have interactive websites that expedite the purchase and renewal of term insurance plans. As the premiums for term plans are quite low, many insurance providers allow the policies to be bought online without a standard medical check-up. It is necessary to research and get the best term insurance plans sitting at home.
Buying term plans in your 20s may result in cheaper premiums
Insurance companies are quite satisfied to offer lower premiums to people in their 20s who buy the policy online. Also, as the operational costs of processing the policy online are cheaper, term plans purchased online are more affordable.
Loved ones will be taken care if you pass away
You may not be married and have children at age 25. However, you will surely have parents and younger siblings who might be reliant on your earnings. What happens to them if you are taken in the future? Are they not going to receive financial assistance? The answer is ‘No’ if you buy a term insurance plan. The high sum assured can help them have comfortable lives even in your absence.
Term Insurance Tax Benefits
A term insurance plan gives tax benefit under two different segments of the Income Tax Act. These sections are:
Section 80C- Under this section of the Income Tax Act, you can enjoy tax benefit on the premium paid towards the plan. The premium paid towards term insurance, up to the maximum limit of Rs.1.5 Lakhs are qualified for tax exemption U/S 80C of IT Act 1961.
Section 10(10D) – The maturity benefit offered by some of the term insurance plans (specifically Term Return of Premium Plan TROP) are also qualified for tax exemption under section 10(10D) of Income Tax Act 1961.
Following are the additional benefits of term insurance plans:
- High Sum Assured at Affordable Premium
- Easy to Understand
- Multiple Death Benefit Payout Options
- Additional Riders
- Income Tax Benefits
- Critical Illness Coverage
- Accidental Death Benefit Coverage
- Return of Premium Option
So, what are you waiting for? Get a term insurance and get ready for the future.