We often delay the process of buying a term life reason for very simple but foolish reasons. The common notions are since we are young and healthy or since at this stage, as the responsibilities are less, we do not need term life insurance. However, contrary to the popular belief, buying term insurance early on is always favourable.
The premium amount is low
The biggest advantage of buying term life insurance early on is the premium amount that you pay is much less as compared to what you would pay if you buy it at a later stage in life.
For example, say you want to buy a policy of Rs 1 crore that would give you coverage till 75 years. If you buy it at 25, the premium amount would be Rs 8,000 annually. At 30, it would be Rs 10,000. And at 45, the premium for the same policy would be Rs 30,000.
The premium remains the same all through, you pay less in total
The premium for a term insurance policy remains the same all through. Hence, if you buy it at an early age, the premium will remain low all through. Also, in total, you would pay much less.
Say you have bought a Rs 1 crore term insurance policy at 25 which will provide you cover till the age of 75, and for this, you pay a premium of Rs 8,000 per year. So in total, you would pay Rs 4 lakh. But, if you buy the same policy at the age of 35, then the premium amount would be Rs 15,000 yearly. So the total amount that you are required to pay over the years would Rs 6 lakh.
Your family gets covered early on
The sooner you buy the term insurance, the sooner your family gets covered. Even if you are not married, your parents might be dependent on you or you might have a loan (vehicle loan, student loan), in case you die early then your family will have to bear that burden. Having term insurance ensures your family will not have to go through financial hardship in case something happens to you.
*Source:FinancialExpress
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