Buying insurance at a young age will help you save and reduce your worry about the future
Can you predict your future Do you think your life will pan out exactly the way you have imagined Unless you have the skills of Nostradamus, the answers to those questions will almost always be ‘no’.
Ill fortune could befall us any point. It could arrive in the garb of a road accident, a medical emergency, loss of empl-oyment, a natural cala-mity, or an unplanned expenditure that cou-ld disrupt normal life, stretching you and your family’s reso-urces, robbing you of your peace of mind.
For instance, Shweta, a homemaker, lost her husband in an accident. Life for her could have come to a standstill. But she sailed through this tragic loss, thanks to the support of the insurance policies that her husband had purchased for the entire family. Her kids completed their education, and she started a new business venture profitable enough to sustain her family.
Such moments of crisis can happen in anyone’s life. To deal with them, a little bit of financial planning is required for every individual.
The earlier you start saving up and investing in life, the better the earnings and lower the risks for you later in life. If you are young, getting a life insurance — be it through an endowment plan or a term plan — is a good way to start off your career. Life insurance not only provides death and accident payouts but also gives a sense of security to those dependent on you.
Paying premiums actively on an endowment insurance plan helps you build a fund. This can partly secure your family's future, and the fund can also be used to finance events such as the purchase of property, a child's wedding, etc. Let’s take a look at some reasons for buying insurance young.
It’s your responsibility Protecting the financial interests of your loved ones is your responsibility. Do not wait till you are married before buying insurance, as you may end up losing some precious years in the wait. You can make a family member such as a parent the beneficiary of your life insurance.
It’s cheaper The first reason is economy. Insurance premiums are lowest for the young. The youth as a demographic are likely to enjoy healthy, long lives. They can purchase the largest possible covers that they can afford and their premiums will be lower than, say, a 50-year-old who may no longer be at the peak of his health and therefore will put the insurer at a greater risk. Let’s say you are a 25-year-old salaried male, with no tobacco habit. You could easily purchase a term insurance cover of Rs 50 lakh for premiums as low as Rs 3,500 per annum.
Sedentary lifestyles Lifestyle diseases are on the rise. Our diet is richer, but our lifestyle is sedentary. The cities that we live in are poison us slowly. And let’s face it: Our jobs aren’t about to get less stressful. Diabetes, hypertension, cholesterol, and cancer seem to be getting prevalent, and it is your duty to protect your family in case anything were to happen to you. Purchasing a health cover will be significantly tougher and more expensive for you once you grow older and have a pre-existing disease.
Developing financial discipline Buying insurance helps you develop financial discipline. If you purchase insurance at a young age, you will have to develop the discipline for saving the money required to pay premiums. This will make you think about it, and come up with solutions to the challenge of spending wisely and saving money. It will also teach you the need for making timely premium payments and not lapsing on commitments.
You may not be qualified later The older you grow, the higher your health risks. Trying to procure any insurance cover — be it life, health, or for critical care — would be comparatively expensive when you are aged. It would be almost impossible after a health scare.
Protect your family from debt Life insurance can also cover your debts, your home loan for example. If you pass away before repaying a debt, be it a home loan or a car loan, insurance will protect your family from having to settle those debts on your behalf. An insurance against loan — usually a one-time payment — settles this problem for you.
What else Insurance premium can help you save tax up to Rs 1.5 lakh under Section 80(C) of the Income-Tax Act. You can avail loans on your insurance. By remaining invested for the whole tenure, your insurance plan would help you develop a handsome pot of money over 10 or 20 years. Those are just a few of the many benefits. So if you are not covered already, buy a life insurance plan today.
The writer is the CEO of BankBazaar.com
