The advantage of opting for term insurance plans early in life

In this economy, financial security has become a necessity. Not only crucial to secure the future of those you love but also your present finances. Term insurance plans are excellent means of ensuring Financial stability in the present and the future. It is also important to acquire the benefit of these plants at an early stage. Let us find out why.

What are term insurance plans?

Financial planning is so important in today’s changing and unpredictable times. One of the best ways to ensure financial security for your loved ones in the event of your demise is life insurance.

Term insurance plans are a type of life insurance that you can avail of for a very affordable price. Life insurance is available for short and long-term tenure depending on your health and preferences. You can purchase term insurance plans for a very high sum assured with a varying tenure of 10 to 100 years. The premiums are reasonably lower than most types of life insurance, making term insurance one of the most popular and affordable choices in today’s economy.

Types of term insurance

Term insurance plans are subcategorised into different types. The various types of term insurance come with personalised benefits. Here are the top types of term insurance from which you can choose the most suitable plans:

Increasing term insurance plans – These policies increase the overall sum assured annually.
Decreasing term insurance plans – These policies help you repay lenders by decreasing the sum assured annually and using the difference to settle liabilities.
Convertible term insurance plans – These term insurances allow you to change a short-term policy to a whole life insurance plan.
Single premium term insurance plans – You can purchase these policies with a single lump sum premium payment.
Term insurance with return of premium – If you survive the policy tenure, these plans allow you to reap the advantages of maturity benefit by returning the premiums paid over the years.
Levelled term insurance plans – These types of term insurance are not susceptible to change in terms of sum assured, policy tenure and benefits. They offer exactly what you purchased.

Based on your immediate financial plans as well as the future goals of your beneficiaries, you can choose the right types of term insurance.

Why should you opt for term insurance at an early age?

Term insurance plans are excellent means of streamlining your current finances as well as securing the future of those you love. It is one of the most reasonably priced Life insurance policies which offers tremendous advantages. But every good thing has its own set of conditions and term insurance is no exception. Here are the advantages of opting for term insurance plans early in your life

The premiums are very low –

At an early life stage, you are less likely to succumb to critical illnesses or major health issues. The risks of an immediate payout are low, which is why the premiums for term insurance purchased at an early stage are much lower.

Tax benefits –
Term insurance plans are eligible for several types of tax benefits. If your annual premium fits the basic requirements of different sections under the Income Tax Act, then you can claim tax exemptions on them. Since the premiums are lower when you apply at an early life stage, it is most likely to abide by the exemption laws. Therefore, not only do you secure your family’s future at a low and reasonable rate of premium, but you can also save money.
Building a corpus –
Term insurance plans help you develop a habit of savings. The low rates of premium available at an early life stage are affordable so you do not miss the payments. It helps you build a habit of putting aside money regularly, which in turn can turn into a savings fund.

Additionally, since term insurance plans are available for both short and long-term tenures, there is a chance that you may survive the policy tenure. If you opt for term insurance with a return of premium, then you can enjoy the maturity benefits for surviving your policy.

Navigating liabilities –
Different types of term insurance offer different benefits. The commonality in all the plans are the corpus that allows you to navigate different liabilities. Whether it is a decreasing term plan that helps you repay lenders or a lump sum maturity benefit that helps your beneficiaries settle liabilities with ease, it is useful.

Based on your financial situation, requirements, and beneficiaries’ goals, you can pick the types of term insurance that are most advantageous for you. In any case, opting for term insurance early in your life will benefit you over the long run. Not only can you save a lot of money in low premiums and tax exemptions, but you can also get rid of financial setbacks quickly.