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Why Buying Life Insurance in Your 20s is the Right Decision?

Life insurance is one of the ways to secure your life and ensure financial independence for your family. People realised its importance during the unexpected pandemic scenario when many people lost their lives and belongings.
 

But, to ensure maximum protection and better utilisation of the financial resources associated with a life insurance plan, you must purchase it early in life. Term insurance, the purest form of life insurance, is one of the most preferred and affordable products. So, let us understand what it means and why you should purchase it early.
 

What is a Term Insurance Policy?
 

A term insurance policy is a life insurance plan that provides a life cover that ensures a lump sum death benefit to your loved ones on your unexpected demise. The plan also provides add-on rider# benefits that can assure additional financial assistance during unprecedented scenarios, such as when diagnosed with a critical illness or a permanent disability. So, would you like to know why you should purchase a term policy early in life? Here are the reasons!
 

Why Should you Buy a Term Plan in Your 20s?
 

Purchasing financial products at a younger age has distinct benefits in varied dimensions:
 

  1. Cost-effective - A term insurance plan is cost-effective. It is considered one of the most affordable life insurance plans in India. Before deciding the sum assured and the premium, insurance providers consider your health condition, whether you have a pre-existing illness or a family medical history with serious disorders. It is used to determine the risk associated with death.

    When you purchase a term policy at a younger age, the possibility of having a health disorder is extremely less, which will make the plan lesser and more affordable.

  2. Long term investment - Life insurance plans in India, such as the term insurance, provides a more sum assured. However, to ensure maximum benefits, you must choose a longer policy term.

    Therefore, if you invest in a term policy at a younger age, you can invest for a longer-term. And, as the extent of financial commitments remains less early in life, you will not find it difficult to allocate the definite premium amount for the term policy.

  3. Add-on riders# - There are additional rider# options that you can choose as part of your term insurance plan. For instance, the term plan with health riders# will provide the insured amount for paying your hospital charges and other medical treatment expenses. The exclusive term insurance plan with a critical illness benefit will pay for treating your critical illness when you are diagnosed with it for the first time in your life.

    So, if your family has a history of a critical illness, such as cancer, you can avail of the critical illness benefit as a precaution. It will reduce the financial burden when you are in extreme need.

  4. Develop the discipline to save - When you start allocating money for your term policy early in life, you naturally develop the discipline to save for your future benefits. With the online term plan premium option, you can pay for the policy at the start of every month, being at the comfort of your house or workplace. It reduces the cost and makes it extremely convenient.

  5. Increase the cover based on your requirements - While purchasing at a younger age, you may not be definite about your commitments and the extent of life cover needed for your family. Therefore, an online term plan provides the option to increase the cover based on your financial commitments at different stages in your life.

  6. Retirement - Retirement is one of the most important phases in your life. It has to be stress-free to ensure financial independence for your family. If you are the sole earning member in the family, you have to ensure financial support to your family even after your retirement. And, to ensure sufficient financial resources, you have to purchase a term plan in your 20s. So, in your unexpected demise, the sum assured will considerably reduce the financial stress. Even if your children are financially independent, the term plan payout can serve as a sizeable financial legacy for your loved ones.

    If you feel your family cannot wisely use the lump sum amount, you can always choose the regular payout option.

  7. Tax* benefits - Term insurance plans also provide tax* benefits. The premium amount and the returns from term insurance qualify for a tax* deduction and tax* exemption under the Income Tax Act, 1961. Therefore, if you start investing in your 20s, you can save a lot on your tax* payable amount.
     
Conclusion
 

A life insurance plan is an ultimate necessity for your family's financial security. It has plenty of benefits when you purchase it early in life, such as in your 20s. You can purchase it at an affordable cost, avail more sum assured, enhance maximum protection with add-on riders#, increase the cover based on your necessity and most importantly, develop the discipline to save regularly.
 

You can ensure the benefits at your convenience by purchasing online life insurance. It will help you monitor the features of your term policy and make the necessary changes as and when required. However, you should ensure to stay invested for a longer policy term to ascertain maximum benefits for your family! 
 

L&C/Advt/2022/Nov/2728

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimers

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
  • #Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch