Life is unpredictable, and taking steps to secure our future and the future of our loved ones is essential, especially in a country like India where family holds great significance. One of the most important financial decisions young adults can make is investing in a life insurance policy. Life insurance not only provides a safety net but also offers peace of mind, financial security, and a sense of responsibility. In this article, let’s explore the importance of buying life insurance early.
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Here are the reasons why buying life insurance early is a good idea.
Life insurance acts as a financial cushion for your family in case of your untimely demise. It ensures that your loved ones don't face financial hardships, debts, or other expenses. The sum assured can assist in covering daily living expenses, children's education, outstanding loans, and even future financial goals.
Starting a life insurance policy at a young age comes with numerous benefits. Premiums for life insurance policies are usually lower for young, healthy individuals. By investing early, you lock in a lower premium for the entire policy term, which means you save more in the long run.
Certain life insurance plans, such as endowment and unit-linked insurance plans (ULIPs), offer a combination of insurance and investment. They help in building a corpus over time, which can be used for various purposes like buying a home, funding a child's education, or planning for retirement.
Life insurance policies also offer attractive tax benefits under the Income Tax Act. The premiums you pay for your policy are eligible for tax deductions, and the maturity amount is tax-free, making it a tax-efficient investment.
Purchasing a life insurance policy instils financial discipline. Paying premiums regularly ensures that you set aside some money for important purposes, encouraging responsible financial behaviour.
Many life insurance policies offer loan facilities against the policy's cash value, providing a financial lifeline during emergencies or financial crises.
Life insurance for young adults is about protecting your family and lessening the financial burden on your parents. In case of unfortunate events, they won't have to struggle financially while dealing with emotional loss.
Here are the types of life insurance plans available in India.
Term insurance is like a shield that protects your family financially for a specific period, known as the policy term.
Whole life insurance covers you for life and often includes a savings or investment component.
Endowment plans provide life cover and savings, offering a lump sum at maturity or to the nominee in case of your demise.
Unit Linked Insurance Plans (ULIPs) are a mix of insurance and investment. Here a part of the premium goes towards insurance, and the rest is invested in market-linked funds.
Money-back policies provide periodic returns during the policy term, along with life coverage.
Following are the advantages and disadvantages of buying life insurance at a young age.
Buying life insurance at a young age often means lower premiums. Insurance companies can underwrite you better (as per your risk profile), and therefore, the cost to insure your life is usually more affordable.
Certain life insurance policies, like whole life or endowment plans, accumulate cash value over time. Starting early means your policy has more time to grow in value, offering a financial cushion in the long run.
Life insurance ensures that your family is not in financial distress if you are not around for them. This financial support can help cover daily expenses, outstanding debts, and future education costs for your children.
Life insurance can serve as a tool for future financial planning. It can be used to finance significant life events such as buying a house, funding your child's education, or planning for retirement.
Buying life insurance early brings peace of mind, knowing that your family will be financially stable even if something unexpected happens to you.
Despite lower premiums for young buyers, the cost of insurance can still be seen as an added financial burden, especially for individuals just starting their careers and managing various expenses.
Certain life insurance plans may tie up your funds for an extended period. Access to these funds may be limited or subject to penalties if you decide to withdraw or surrender the policy prematurely.
Life circumstances and financial needs evolve over time. The life insurance plan you choose early may not align with your requirements as you grow older and your responsibilities change.
Some individuals may find it challenging to commit to long-term premium payments due to uncertain or fluctuating income sources, especially in the early stages of their career.
Young individuals might have limited financial knowledge, making it crucial to thoroughly understand the terms, conditions, and implications of the insurance policy they're purchasing.
When exploring life insurance policies, it is important to understand the costs of different options. The life insurance premium calculator is a helpful tool to consider when planning your financial future. By accurately estimating your sum assured, premiums, and policy tenure based on your details, the tool helps you make informed decisions.
Whether considering a term insurance plan for 1 crore or exploring a simpler term policy, the premium calculator ensures you get the right coverage at the best price. A term insurance plan in India is an affordable way to secure extensive life coverage for your loved ones by paying lower premiums.
The ACKO Flexi Life Plan is a unique term life insurance plan. Imagine it as a promise that says, "If something happens to you, we've got your family's back financially." Now, what makes this plan extra cool is that it's really flexible!
Flexibility means you can change things in the plan as your life changes. Let's say you want your family to get a bit more money or the plan to last a bit longer - you can tweak that! You can also decide how often you want to pay for it and how the money is given to your family.
And guess what? It even helps you create a will! A will is like a special letter where you can say who gets what when you're not here anymore. This way, you can make sure your family gets the money just the way you want it. So, it's not just any insurance; it bends and adjusts to what you need, making sure your family is taken care of just the way you'd want it!
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content, and before making any insurance-related decisions.
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Reviewed by Vaibhav Kumar Kaushik 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
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