Why Term Insurance Makes Sense In Early Stages Of Your Career

Freshly minted in the workforce, young professionals juggle numerous financial responsibilities, often making insurance seem like a secondary concern. This sentiment is particularly pronounced among those who are not only new to their careers but also enjoy the peak of their health, leading them to question the immediate utility of term insurance. However, the early adoption of term insurance holds untapped financial advantages that many overlook.

Securing a term insurance plan at a young age can be a strategic financial move, offering the opportunity to lock in significantly lower premiums. This decision not only yields immediate savings but also extends financial benefits well into the future. This post aims to shed light on the benefits of early-term insurance procurement, confuting common misconceptions and highlighting the advantages. For those curious about the specifics of what a term insurance plan can offer, using a term insurance plan calculator can provide personalised insights and guide informed decision-making.

Benefits of Getting Term Life Insurance Early in Your Career 

●Access to Lower-Term Insurance Policy Rates: Individuals are required to pay a lower yearly premium amount if they decide to lock in on a term insurance plan early. As you get older, the premium amount that must be paid for life insurance increases significantly. For example, an 18-year-old working individual might have to pay as low as Rs 459 per month for their term insurance. On the other hand, a 45-year-old individual will have to pay much more if they decide to get term insurance at that age. 

●The Yearly Premium Amount is Locked for Life: You might be wondering how getting term insurance yearly is beneficial if the premium amount goes up as you age. The reason is that the premium amount you initially pay when you get the plan is locked for life. Hence, if you decide to get term insurance at a later stage in life, you have no room to negotiate and will be forced to pay a more costly premium. 

●The Many Tax Benefits of Term Life Insurance: The Indian Income Tax Act contains certain provisions that offer tax benefits to individuals who opt for a term insurance plan. These are: 

➢Section 80C: Under this section, individuals can claim a tax deduction for the amount they pay under their term life policy. Individuals can claim up to Rs 1,50,000 of their insurance premium as tax deductible. 

➢Section 80D: Similar to Section 80C, Section 80D also offers tax deductions to individuals who pay a term insurance premium. Section 80D offers deductions up to Rs 25,000 for premiums paid toward term insurance with a critical illness cover option.  

➢Section 10(10D): The tax advantages also apply to the death benefit awarded to the nominee. In the event of the policyholder's passing, the family is entitled to receive the death benefit or sum assured. This ensures that the family receives the essential financial protection it needs without the burden of taxes.

●You can Secure Your Dependents Sooner: Planning for the long-term future is always a good idea. If you plan to have a family one day, you can secure their future early on with term insurance. Additionally, if you are planning to take care of your parents once they retire, then term life insurance is a safe bet.  After all, it will be easier to rest knowing that you have effectively planned for the future in a world that is full of uncertainties. 

●Combine it With Your Employer’s Term Insurance: if your employer is already offering term insurance, you can supplement that plan with a term insurance plan of your own. Doing so can significantly increase the insurance amount your dependents will receive. Additionally, having a term insurance plan of your own protects you in case you change employers. Your new employers may not offer term insurance, so having a personal term insurance plan can ensure that you are always covered. 

How to Use a Term Insurance Plan Calculator 

A term insurance plan calculator provides an estimated premium amount for your desired insurance coverage amount. All you have to do is check out a term insurance plan calculator and enter the required details to receive your calculation. These calculators are free to use and easy to access. Simply visit the official website of any company, like ICICI Prudential Life Insurance, that offers term insurance to begin calculating your term insurance plan. Remember to enter your information correctly to get an accurate estimate of your potential term life insurance plan. 

Numerous financial advantages come with opting for a term insurance plan early on in your career. Not only does it ensure that your family is secure, but it can also save you funds in the long run, thanks to premium amounts. There are also tax benefits to consider. Term insurance is considered one of the simplest insurance products with features that are easy to understand. Furthermore, individuals receive flexible payment and pay-out options, which allows them to make customised plans easily. If you are interested in knowing what kind of premium you would be expected to pay for your current age, remember to use a term insurance plan calculator.