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Why Term Life Insurance is a Smart Move for Young Adults

New Delhi: If you’re a youngster who is already earning, then you may find yourself asking the question- why term life insurance? This happens quite often when these plans are recommended to young adults. Of course, you’ve just attained financial independence and are raring to go out and explore the world and spend on things you’ve always wanted. However, some amount of future planning is always crucial to ensure a better future. This is where a term plan can be a really smart move on your part. Read on to know how.

Why You Should Choose Term Life Insurance Early On 
Choosing term life insurance as a young adult is a smart move, without a doubt. Here are a few reasons that will convince you.

Higher Coverage for Cheaper Premiums- One of the biggest advantages of opting for term plans as a young adult is higher coverage for lower premiums. When you’re healthy and young, then you can choose sizable coverage at a premium amount that is way lower than what will be paid by someone in his/her 30s, 40s, or 50s.

Longer Coverage- Purchasing term insurance will help you obtain suitable coverage for a longer duration. If you purchase it at 25 years of age, for example, then you can get the benefits of coverage for close to 50 years. This goes down if you buy term plans later in life.

Financially Secure Your Loved Ones—Now that you’re a young adult, it is time to think about financially securing your parents and other family members. Life is unpredictable, and in case anything unforeseen happens, at least they will be financially taken care of. You can also keep increasing your coverage with every life stage, i.e., marriage, the birth of children, and so on, accounting for newer needs into your calculations.
Enhance Your Finances—This is one advantage that you may not realize immediately. Investing in something early on will help you develop positive habits regarding savings and investments. It will also build more financial discipline that you can harness to keep scaling up your investments later on.

Higher Savings- If you obtain life insurance early on in life, then your premiums will be lower for the whole period. Now think of how much you’d have to pay for life insurance at every stage of your life. This will be the amount that you will ultimately save in the long run. You can invest this for better returns as well.

Tax Deductions- As a smart young adult, you’ll naturally look to maximize your tax deductions. Term insurance premiums are deductible under Section 80C while adding health-related riders also gives you tax deductions under Section 80D. At this stage of your life, every penny counts in terms of building your financial foundation. Hence, tax savings are something that makes term life insurance plans great choices for young professionals.

As you can see, term insurance is a value addition to your financial portfolio. It is in fact, something that you should start off with as soon as you start earning. The benefits will add up considerably over the long run for sure.

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