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It is often said that the right time to buy life insurance is definitely ‘way sooner than you think you should!’
While life insurance is integral to most sound financial plans, the need to save in one amidst increasing uncertainties is pressing. Financial experts believe that the sooner, the better when buying life insurance.
If you have been contemplating and still looking for an answer to “Is there a best time to buy life insurance and what is it?”, then read on!
What is a Life Insurance Policy?
It is a contract where the insurance company agrees to pay your nominees a pre-determined amount in exchange for premiums. The primary objective of a life insurance policy is to provide financial security to your loved ones in your absence. Life insurance consists of two variants:
- Term Insurance: A pure insurance product provides a financial cushion to your family through death benefits.
- Endowment Insurance: It combines investment with insurance in a single plan. These investments can be further bifurcated into:
- Unit Linked Insurance Plans (ULIPs): ULIPs allow capital appreciation through market-driven growths, and
- Guaranteed1 Income Plans: These plans provide maturity benefits, irrespective of market performance. Hence, endowment plans help save for your future.
Besides, premiums paid are allowable as a deduction subject to compliance of section 80C of the Income Tax* Act. Maturity and Death benefits are also exempted under section 10 (10D) of the Income Tax Act. Hence, life insurance is a multi-faceted product.
When is The Right Time to Buy a Life Insurance?
Life insurance is necessary, particularly where your loved ones depend financially on you. If you are just starting a family – getting married or planning a kid- this is the best time to buy a life insurance policy. The pandemic has made the importance of life insurance more obvious. Having a life insurance policy serves the dual purpose of securing your life and assuring financial security for your loved ones after your demise.
Saving in a life insurance policy at an earlier stage has multiple benefits:
- Affordable Premiums: Buying insurance in earlier years allows you to enjoy modest savings through lesser premiums. Besides, as age advances, the probability of having health problems increases. This, in turn, increases the cost of the insurance.
- Longer Duration: Societal norms are currently changing. Many prefer settling down and having kids at a later age. Moreover, home loans span a longer duration. Hence, it has become important to consider insurance plans for a longer duration. This again hints at the need to start the policy coverage early.
- Corpus Over Time: Staying invested for the long term allows your money to grow. You can enjoy market-linked returns2 through ULIPs. It can help in the gradual generation of wealth. Thus, it can potentially meet long-term objectives like creating a retirement corpus.
It is prudent to have your life covered when young. However, as it is rightly said, “Better late than never”.; once you know the need and benefits of life insurance, you must buy a suitable policy at the earliest.
How Much Life Insurance Do You Need?
The amount of coverage is important to ensure a comfortable life for your near and dear ones. It is recommended to buy coverage of at least 10 times your annual income.
Additionally, consider the current expenses, standard of living and your family's future requirements. Are your children planning to go abroad for higher education? How much do you want for their marriage? Do you want to save for a retirement corpus? All these questions should be thoroughly assessed to determine the approximate coverage needed.
You also need to account for the loan repayments. You do not want your family to be stuck with EMI payments in case of any eventuality. So, ensure that you include the total outstanding amount of all your financial liabilities in your term insurance sum assured.
Finally, do not forget to factor in the inflation rate.
How to Buy Life Insurance?
You can buy an insurance policy by submitting the requisite details and supporting documents to the insurer. The policy may be purchased either offline or in online mode. The offline mode requires you to visit the insurer's office or reach out to your insurer to visit you basis availability. You can also avail of insurance through your Bankers or Financial planners.
On the other hand, the online option allows you to buy an insurance plan at the convenience of your home through a few clicks. The online method is comparatively faster and easier and is gaining popularity. Besides, it supports minimum human interaction, which is recommended during the COVID-19 pandemic.
Tata AIA Life Insurance Policies
This is a common question in the minds of many. When it comes to family, you always strive to give the best. Hence, it is important to reach out to a trustworthy insurer. The insurer should be able to care for your family during difficult times. The insurance company should be able to support through a seamless claim settlement process. TATA AIA Life Insurance is one of the reputed names in the insurance industry. It booked a death claim settlement ratio3 of 99.01% for FY 2022-23.
TATA AIA Life Insurance offers varied insurance solutions catering to specific requirements:
- Protection Solutions: It provides pure protection through a term insurance policy.
- Wealth Solutions: You can opt for ULIPs to enjoy insurance and market-linked benefits.
- Savings Solutions: These plans offer protection and investment solutions. The investments are independent of the performance of the stock market.
- Retirement Solutions: It helps you plan a peaceful retired life while safeguarding your family from adversities.
Tata AIA Life Insurance Riders#
You can also check out our insurance riders that can help you further enhance the coverage and protection of your life insurance policy. Some of the riders# offered by Tata AIA Life are:
- Tata AIA Life Insurance Waiver of Premium Plus Rider# – Non-Linked, Non-Participating Individual Health Insurance Premium Paying Rider#( UIN: 110B029V02)
- Tata AIA Life Insurance Non-Linked Comprehensive Protection Rider# A Non-Linked, Non- Participating Individual Health Rider# (UIN:110B033V02)
- Tata AIA Life Insurance Non-Linked Comprehensive Health Rider# - A Non-Linked, Non- Participating Individual Health Rider# (UIN:110B031V02)
- Tata AIA Life Insurance Accidental Death and Dismemberment (Long Scale) Rider# – Non-Linked, Non-Participating Individual Health Insurance Pure Risk Premium Rider#(UIN: 110B028V03)
The above riders are available with our term insurance and savings solutions. If you are opting for our ULIPs, then you can choose from the following set of riders:
- Tata AIA Life Insurance Waiver of Premium Plus Linked Rider# - Linked, Individual, Health Insurance Rider#(UIN: 110A025V02)
- Tata AIA Life Insurance Waiver of Premium Linked Rider# - Linked, Individual, Health Insurance Rider#(UIN: 110A026V02)
Our health-based riders# not only offer coverage for major critical illnesses but also ensure coverage for COVID hospitalisation and death.
You may visit the insurer's website for the distinct features of each product and rider#. Or, you can contact TATA AIA Life Insurance to understand the associated coverage and the linked benefits. This shall enable you to buy the insurance policy that best suits your needs. Click here to know more.
The Bottomline
It is important to have an insurance policy to secure your family’s financial future. Hence, life insurance introduces financial security and stability. Starting early is crucial to reduce the impact of contingencies in the best possible way. Thus, now is the right time to buy life insurance to enjoy a financially secure and peaceful life.
L&C/Advt/2023/Aug/2604
