Here’s Why Term Insurance is Necessary at Every Life Stage

Here's Why Term Insurance is Necessary at Every Life Stage

A strong insurance plan with end-to-end coverage is a fundamental requirement for most people and their families today. With inflation in living costs and medical expenses, one needs to secure themselves and their dependents from financial and emotional distress. Understanding the universality of these anxieties, many insurance providers have sought to introduce term insurance plans that cater to people across all income brackets. 

One can use a term plan premium calculator to find due projections to help them make their decision and the affordability of different plans. A term insurance plan is made effectively to cover the needs of the insured and their dependents through an assured benefit sum in the event of the policyholder’s demise. A basic term insurance policy in India is considered to be one of the most affordable means of securing one’s future where premiums are low and one can customise their coverage and payout methods as per their convenience. One can use a term plan premium calculator to see the premium they may have to pay as per the age they buy a term plan at. 

When buying a term insurance plan, one should be aware of the incentives and perks that can be accessed if they invest at a young age. To start one’s investment journey at a time when they are in their mid-to-late twenties can be a vital financial decision as an early start towards a secure future can aid in financial planning and achieving future goals in a seamless manner. Let us look at how investing in term insurance at a young age can benefit the policyholder:

1: Low Premiums: The premium cost of term plans are determined on the basis of factors such as the policyholder’s age, lifestyle and dependents. For example, a younger policyholder will have a low cost premium as they have less liabilities, are healthy and have less dependents; whereas an older policyholder will have higher premium costs as they have liabilities and are more prone to illness. As the cost of premiums is significantly less and one can alter their terms of coverage once they have major life developments such as a marriage or a child. One can use a term plan premium calculator to see a projected premium they may have to pay for a plan before investing. 

2: Lower Risk and Vulnerability: Investments and insurance plans targeted towards wealth accumulation are interdependent on one another as they help build each other. The money sent into these instruments is focussed on growing in value over time, and also allowing the insured person to fulfil their goals. 

To be able to build a corpus and have a strong investment portfolio, one needs to be secure about things such as their life insurance expenses. The reason for that, is that in the due course of earning their capital in high-return schemes, one may experience financial losses in the market; hence when a person is insured under a term insurance plan their losses will not affect their coverage or tenure. A term plan calculator can help them gain visibility in regards to the sum assured they have as a lifeboat in the event they require those funds. 

While investing in market-linked schemes and money instruments, one will not have to compromise on their life insurance requirements as they are increasingly affordable and customisable as per the customer’s needs.

3: Tax Benefits: Since lawmakers understand the universality of needing to secure one’s future in the face of unforeseen emergencies; the premiums paid for a term insurance plan and the payout sum thus received from the same at the time of maturity is exempted from taxation under Section 80C and 10(10D) of the Income Tax Act, 1961.

Term life insurance plans are therefore an ideal choice of insurance and investment where the taxpayer can avail a tax deduction of up to Rs. 1, 50,000 from their net taxable income on account of the investment premiums they may have paid. 

It is a misconception that one only requires term life insurance policy when they are well past their younger years and only once they have dependents such as a spouse or children. If you are new to financial planning, you may find yourself struggling between the multiple options available such as life insurance vs. general insurance. However, you must remember that life insurance serves as a foundation of your financial planning since it secures your life against unseen threats. Therefore, equipped with the best term insurance and a strong insurance profile strengthened at a young age; a person can avail all the benefits of secure finances and a worry-free future.


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