How owning a life insurance policy at an early age may help you?

Life insurance plans offer both savings options and security of insurance coverage for any unexpected event. Investing in a life insurance plan at an early age could be the best option to reap maximum benefits. Generally those who enter their work life in their 20s often ignore this important aspect which could pave the way for a financially secure future. While an insurance cover might not seem to be an urgent need, it can still be of great help, especially in cases of financial emergencies. This is the very reason why experts mostly suggest buying life insurance at an early age as people might not have any financial responsibilities at their younger age and can invest a substantial amount in life insurance plans for a higher amount. Another benefit is, most of the life insurance plans come with lower premiums for young customers. If you purchase life insurance at an early age the premium amount will be lower as the same goes up with age.

Here are a few benefits you should know about availing a life insurance plan at a young age.

Why should you buy life insurance at a young age?

Low premiums: One of the reasons for buying life insurance at a young age is the advantage of receiving lower premiums. The premiums are calculated on the basis of multiple factors like age and health risks. So, lower the age less will be the premium amount.

Financial security: Buying life insurance at an early age helps to make more savings for a long-term plan and thus the accumulated fund could be helpful in case of the policyholder's untimely demise. This will provide financial security to the family members.

Longer coverage: The sooner one buys an insurance plan, the longer he can get the coverage at an affordable premium. This means you can buy a long-term plan for say 40 years, knowing that your family is secure for this time period.

Benefit of compounding: If you start investing in a life insurance plan early you get a longer duration for investment. Apart from the insurance coverage the maturity amount could turn into a substantial fund due to the magic of compounding.  

Tax benefits: Investors can also avail of tax benefits if they buy a plan at a young age. Tax deductions up to  Rs 1.5 lakh can be availed for premium paid towards life insurance plans under Section 80C of the Income Tax Act, 1961. The earlier one starts investing, the longer he can enjoy the additional tax benefit.