Life Insurance: Things you should consider when buying life insurance at a young age

Purchasing a life insurance plan often remains a low priority for many young people after they get their first job and enter into professional life. Many don’t realise the advantages of buying a life insurance plan at a young age.  Life insurance plans come with both insurance coverage and savings options. That’s why it could be a wise financial decision to procure a life insurance plan at the early ears of your employment.

Investing in life insurance at an early age can be a life saviour as it not only offers a good savings option but also provides financial security to the family in case of any unfortunate incident. Also, another reason to get insurance at a young age is very simple. The younger a person is, the lower remains the premium.

If you are confused about purchasing a life insurance plan, here are a few factors that you should consider before making a decision.

Factors to consider when buying life insurance at a young age

Life cover: As a person's age progresses, their family life takes more priority as he/she focuses on marriage, family planning and career. With these forthcoming additional responsibilities, it becomes extremely crucial to invest in life insurance plans that provide financial coverage in case of any eventuality.  Notably, the life cover should be sufficient to cover every sort of financial liability and provide a monetary surplus.

Lesser premiums: Those in their 20s and mid-20s must take into consideration that investing early in a life insurance plan may come with lower premiums. Thus spending less on premiums helps to save more and invest the amount in other avenues.

Separate plans: It is suggested that individuals also opt for separate insurance plans, besides the ones provided by their employers. As the employees' coverage under a group term insurance plan provided by the employers is only valid till the person works with the same employer, this will be no longer applicable when you switch the job or change your career course. Thus, investing in a separate plan from a young age will help you to have a secure option at a later stage in life.

Tax benefits: Purchasing insurance plans at a young age also comes with certain tax benefits. These tax benefits can be availed for both premiums and the claim that is paid and received later. While the insurer can claim tax deductions under Section 80C, the insurance claim will be exempted from taxes under Section 10 (10D).