A lot of individuals think it is not necessary to buy life insurance coverage at an early phase of life. The reason behind buying a life insurance is to secure the future of the loved ones even after you are not around anymore. Buying it at an early age, saves a lot for your future and it is one of the best investment options. The financial experts would also propose you to buy life insurance at early years of your earnings.
Investing in life insurance at early stages of your earnings enables you to save more and to invest wisely. Early investment is a smarter choice and it symbolises how wisely you have planned the finances. The mindset of a common man in their early twenties is that they don’t have a family and will survive longer which makes them not to invest in the life insurance plans. On the other hand, after having a family, the responsibilities and the expenses increase making it harder to cut off from the cash inflows and invest into life insurances. With the mortgage and expenses for basic family needs, it becomes difficult to cut out the premiums of life insurance. One needs an extra security in terms of finances when they are only bread-bearer in the family and have to take care of the family needs. Life insurance not only just acts as the best investment option but also as a way to safeguard the future of the dependants.
Life insurance provides financial coverage on the death of the policyholder to the designated nominee as per the policy rules. The financial coverage to be received after the death of policyholder can be calculated by taking into account all the family’s need and any future life events. The death coverage provides financial support and stability to the family in their difficult times.
Early investment into the life insurance is always a better option
One needs to set aside some amount of money for their family so that they can have a smooth life when you are not around to take care of them. As per a study, marriage and life of the spouse after you are gone are some of the major life events that require ample amount of money. Death coverage received by life insurance can be a helpful aid in keeping up with the needs. The premium of life insurance become cheaper when you invest in them early. You save more when you invest early in life insurance keeping you a step ahead of others. As rightly quoted, the younger you are, the merrier.
Here are some key reasons which will encourage you to buy life insurance at young age –
- Health is wealth. Begin saving in early years of earning as you would not stay as energetic and active as you are in your twenties. Life insurance coverage considers your medical health at the time of purchasing. If you are healthy, it would be easier and cheaper to pay the premium. Applying for the policy in later years can be a burden with the high premiums amount. Start saving 10% of the total income and invest it into life insurance.
- Being a long term client to the life insurance company earns you loyalty benefits. To maintain competitiveness in the market, life insurance companies provide loyalty benefits and other additional securities to the clients. Investing in your early twenties would result in lots of loyalty benefits till the time you turn fifty. This makes the early investment into life insurance more appealing.
- Life insurance provides cash value on the financial coverage. Cash value of the insurance is an important factor. It empowers you to take loans from the banks and borrow money at any important life events. Investing early in the twenties entitles you to apply for the loans against the cash value of life insurance.
- Save your cash. It is always recommended to save cash, yet keeping aside the cash can lessen time value of money and hence life insurance is an ideal approach to contribute the savings in investment.
- You can likewise get multiple tax benefits. The premiums paid for the life insurance decrease the total taxable income and accordingly one can utilize it to save some amount from their income also.
- The earlier, the less expensive. This is valid for life insurance, as you have more than enough time to save and invest your finances. At the end, your loved ones will receive a decent sum of money to lead their lives smoothly without financial crisis. And all of this can be done at cheaper premiums.
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Disclaimer: The views shared in blogs are based on personal opinion and does not endorse the company’s views. Investment is a subject matter of solicitation and one should consult a Financial Adviser before making any investment using the app. Making an investment using the app is the sole decision of the investor and the company or any of its communication cannot be held responsible for it.