Buy term insurance plan now, don't wait for lifting of Coronavirus lockdown; save your money

Term Insurance Plan: There is lot of myth revolving around term plans as people still believe it as an investment and should give returns in terms of money on maturity, which is absolutely wrong. Term plan is pure insurance and it gives financial security to the family in case of sudden demise of the term insurance plan holder. So, those who believe Term Insurance Plan are useless need to rethink their decision and what is more, they should buy one on an urgent basis, say tax and investment experts. 

What is the rush? Well, after 10th April 2020, premium of term insurance plans are expected to rise from 15 per cent to 40 per cent! So, if an earning individual is planning to buy a term insurance, he or she shouldn't wait for lifting of the lockdown. They should buy it online before 10th April 2020 and save whopping money on the term insurance premium.

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According to the media reports quoting term insurance brokers, premium of the term insurance plans were bound to increase from 1st April 2020, but due to the 21 days Coronavirus lockdown across India, the decision to increase premium amount has been put in abeyance. But, the abeyance won't be for long. The decision in regard to rise in Term Insurance Policy premium is expected to come any day after 10th April 2020. The insurance broker further being quoted that the rise in term insurance premium would be to the tune of 15 per cent to 40 per cent.

Advising earning individuals to buy Term Insurance Policy at the beginning of career, Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "Insurance can be bought from 18 to 45 years of age. However, it's advisable to buy term insurance at the beginning of the career as lower is the age of policy holder, lower will be the term insurance policy premium. So, if someone buys Term Insurance Policy in the early twenties, he or she can get the term insurance policy at nominal premium." He also advised that we buy term insurance to provide financial support to our nominee in the case of sudden untoward incident taking place in life, so one should not think about the return on term insurance plan as some of the insurance companies are giving term insurance with some assured returns as well. But, it's better to buy a pure term insurance policy.

On why one should buy Term Insurance at early phase of career, Jitendra Solanki, a SEBI registered tax and investment expert said, "After buying a term insurance policy, terms and condition of the policy doesn't change. Hence, once you buy term policy at lower age, your premium will remain the same even when you grow old." Solanki said that due to the lockdown, the insurance companies haven't increase the premium of term insurance policies. But, once COVID-19 lockdown is over, insurance companies are expected to increase their term policies immediately. So, one should buy it before lifting of the COVID-19 lockdown, he said.