An ideal time to choose a life insurance plan
Often it is observed that when we are too young we ignore buying life insurance, mainly because we feel it is not required for us. We need money to buy luxurious things like cars, mobiles, gadgets, holidays, partying etc. At the most you take alife insurance simply for the sake of tax deductions, and at times neglect its benefits thinking it’s not for us. But in the world filled with uncertainties where even a car or mobile is insured why is your life not? Therefore, every concerned person who wish to secure the future of them and their loved ones should go for life insurance plan.
The article will guide you through the ideal time for taking a life insurance plan and the benefits associated with it.
Taking a life insurance plan at different stages of your life has different impacts on your financial planning and security efforts. The early you adopt for a plan the higher is the benefit that you get. A 20 year’s policy taken at the age of 25 would be very helpful for you during some days of financial need at the age of 45, like your child’s higher education, whereas the same taken at the age of 40 may not turn out to be of great help for you at 60s. We are not saying that the plan will not help you financially but getting right utilization of your money at the right time is crucial in part of your financial planning.
Adopting a life insurance plan at a young age has greater benefits. Since it is based on the power of compounding, the earlier you start investing, the lower the premium charges are. Secondly, you’re young, fit and healthy so you don’t require any medical tests. This also makes it easy for you to work hard and generate that extra income to invest in these premiums. Depending on the type of life insurance plan one opts for, life insurance offers multiple financial benefits along with the protective cover in case of any unfortunate or sudden demise of the individual. So, life insurance can be seen as a long term saving plan which keeps the money compounding and also offers protective cover in case of any mishap.
Term insurance plan can be one of the well suited plans for youngsters. So, assuming that an individual opts for a term insurance life cover of Rs.1 Crore at the age of 30 years and since most term insurance policies expire at the age of 60, the individual will have a policy term of 30 years. However, if the same person waits another five to ten years it reduces the policy term significantly thereby increasing the annual premium amount substantially. Here we are trying to make you aware of the extra cost incurred with the plan postponement. Therefore, age plays a significant role in deciding the quantum of life insurance premium to be paid every year. One thing is sure that premiums are cheaper for younger people considering the fact that they are fit in offering lower risk for the insurer.
It is important to know that most insurance companies offer life insurance up to 60 or 65 years of age but if your family is still dependent on your earnings, it makes sense to consider insurance post 60 as well. Some insurance companies have now started providing life insurance for senior citizens who are still earning well in their 60's.
While deciding upon a life insurance plan make sure it takes care of all basic expenditure for your family in case of your sudden demise. These could be expenses like loan liabilities, education and marriage of children, medical expenses on spouse or partner which all has to be considered while calculating the final cover. It is advisable the sooner you sow the better you shall yield the benefits of securing the future of you and your loved ones.