Why is the 20s considered the ideal time to purchase term insurance?

Mumbai (Maharastra): Term insurance is a perfect, pure life insurance cover that includes all of the aspects you need, particularly if you want your family to be financially secure after you pass away. However, the most frequently asked issue is when should you purchase a term life insurance policy. Many prospective customers are uninformed of the benefits of making early investments in term plans, and as a result, they are unsure about when to get term insurance. The earlier you start investing in a term policy, the better.

Many young people though assume that investing in a term plan is a faraway concern that may be addressed later in life. In this article, we will go over to understand when is the best time to buy the insurance policy:

When is the right time to buy Term Insurance?

The early twenties: Young people in their twenties are either going to college or starting their jobs. They're young, healthy, and vibrant. They do not think about long-term savings, financial goals, or retirement planning. Furthermore, when they come across an online term policy, they put off purchasing insurance or completely ignore it. However, it is best to begin early. Their expenses are lower, allowing them to save for the future. During this time the total premium payable will also be less than one know using a term insurance calculator. Your early 20s are the ideal age to purchase a term life insurance policy because it is extremely affordable and allows you to begin saving on taxes as soon as you start working.

Mid/Late 20s: You have either begun or are about to begin a new chapter in your life. Newlyweds see this as an ideal moment to begin investing and building a solid financial foundation for their family. However, it is critical to note that, in order to provide the best financial security for your spouse and children, you will need more term insurance coverage than you had in the past. If you have any loans or credit facilities for a home or a car, make sure to include the outstanding loan amount in your term insurance. 

However, most experts say that your twenties are the best time to purchase a term plan.

Lower premiums: One of the most significant advantages of purchasing a term plan in your twenties is the low premium amount one will be able to get. One can use a term insurance calculator and change age while calculating the total premium payable and one will be able to see the stark difference between the premium one would be paying at 21 and others at 29. Insurance companies analyze your age and health status when determining the premium amount, and you are naturally healthier in your mid-20s. This translates into lower premiums than you would be able to get later in your life. 

Increasing life coverage at a lesser cost: As your family, income, lifestyle, and financial obligations grow, so should your term insurance coverage. If you purchase term plans that allow you to increase your life cover within the existing policy, you can get the extra coverage at a lower price. 

Easy purchase process: Purchasing a term plan doesn't take much work during that age. Many insurance companies also offer online term policies. You may quickly review the term plan's features and offers before purchasing. Term insurance calculators and other internet tools further make it easier for you to make an informed decision.

Stay protected for longer: When you acquire a term plan in your twenties, you get long-term financial security. You can choose a policy tenure of 20 to 25 years. The plan assures your and your loved ones' financial security while also protecting you against a small cost paid to the insurance provider.

Dependents cared for even during your absence: People in their twenties do not have dependents. However, if you are the sole breadwinner in your family, a term plan may help protect your loved one's future after your death. The term plan payout allows them to fulfil their regular expenses while also paying off any other loans or commitments they may have. Investing in a term plan at a young age provides a sense of peace since you know your family will be cared for after you.

Tax benefits: Aside from protecting your family from life's uncertainties, another significant benefit of investing in term insurance is tax savings. Section 80(C) of the Income Tax Act, 1961 allows for a maximum tax deduction of ₹1.5 lakh on policy premiums. As a result, if you start saving for term life insurance at a young age, you will be able to benefit from higher tax savings. 

Those policyholders who are concerned with getting the most out of their term plan will buy the plan in the initial phase of their career. Purchasing a term plan at a young age is advantageous because you are less likely to have any serious disease that could hamper your chances of getting term insurance at a reasonable premium. 

Conclusion

In today's world, various insurance firms provide term life insurance coverage. Before investing in a term plan, you should constantly consider your age, income, debts, liabilities, expenses, and coverage options. Our term plans give payment flexibility with the option of receiving income, a lump sum, or both. The Life Stage option enables you to increase coverage at key milestones. Furthermore, the term plan provides benefits to women with lower premium rates.