As a young professional, your plate is probably overflowing with plans and aspirations. From travelling to buying your first home or finally indulging in those childhood dreams, you are likely juggling a lot. Amidst all this excitement, it is easy to overlook the importance of financial security. But that is where term insurance comes in.
Term insurance is a must-have for young professionals, and the sooner you buy it, the better it can be for your overall financial health.
Why should young professionals buy term insurance?
It might feel like you are too young to worry about insurance, but term insurance works best when you start early. Here’s why:
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Younger professionals qualify for lower premiums
Insurance companies tend to favour younger applicants because they are generally in better health. The likelihood of developing illnesses or making claims is relatively lower at a younger age. This reduced risk allows insurers to offer lower premiums.
What’s more, term insurance premiums remain fixed throughout the policy term. So, by purchasing a term plan early, you lock in that lower rate for the entire duration of the policy. Over the years, this can translate into substantial savings while offering your loved ones financial security.
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Younger professionals are more likely to be approved for high-coverage plans
Being young and healthy also works in your favour when it comes to selecting the plan’s coverage. Insurers see you as low-risk, which increases your chances of being approved for a high coverage amount. This allows you to secure a significant sum assured that can provide financial support for your loved ones if something happens to you.
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Purchasing term insurance as a youngster ensures long-term financial security for your loved ones
Buying term insurance early gives you the advantage of longer coverage. Many term insurance plans offer coverage beyond 40 years or even lifelong protection. The sooner you start, the longer you can secure your loved ones’ future. In case something goes wrong, your family will not have to worry about financial stability. And you will have peace of mind knowing that your loved ones have the support they need, no matter what life throws your way.
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Term insurance can offer additional benefits to young professionals
Term insurance is not just about life coverage. It can be customised to meet several unique needs. You can enhance your policy to cover more than just life risks with the addition of optional riders.
For instance, you can add a critical or terminal illness rider to combine health and life insurance under one plan. These riders offer a lump sum payout if diagnosed with a specified critical illness and ease the burden of medical expenses. If your job involves frequent travel or carries a higher risk of accidents, an accidental death and permanent disability rider can provide added financial protection, ensuring that you or your loved ones receive additional financial support in case of unforeseen accidents.
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Term insurance can help young professionals save more through tax benefits
As a young professional, saving is a top priority, especially with goals like buying a house, saving for a car or planning for retirement. Every bit of extra savings counts, and term insurance can help with that through tax benefits.
Under Section 80C of the Income Tax Act, 1961, you can claim deductions of up to ₹ 1.5 lakh per year on the premiums paid for term insurance. Additionally, if you have added a critical illness rider to your policy, you can claim an extra deduction under Section 80D for the premiums paid.
This dual benefit leaves you with more savings to put toward achieving your dreams.
Conclusion
It is never too early to invest in term insurance. Irrespective of whether you are on your first job or have been working for a couple of years, make sure you prioritise buying term insurance as soon as possible to maximise its benefits, lock in lower premiums and secure your loved ones financially.
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