Many young working individuals might not feel the necessity to buy a term life insurance plan. After all, youth is a time to enjoy life and work hard to achieve life goals. However, planning for financial exigencies is also crucial as there’s nothing more uncertain than life. Also, buying a term insurance plan while you are young and earning has several benefits. Let’s find out what is term plan and its benefits while you are earning.

What is Term Life Insurance?

A term plan is a life insurance policy that offers life coverage for a specific period. The policyholder pays premiums for a fixed tenure in exchange for a death benefit to its beneficiary.

Why Buy Term Insurance While You Are Earning?

It is essential to strike a balance between enjoying life and fulfilling financial responsibilities. A habit of financial planning adopted at an early age ensures long-term financial security. Term insurance plans serve a similar purpose. Here are five reasons you should buy term insurance in your earning age only.

1. Lower premiums

To calculate term insurance premiums, the company considers several factors, including your age. As young people are less prone to illnesses or premature death, insurance companies compensate for the advantages by giving you lower premium options. So, if you buy a term plan in your 20s, you will have to pay lower premiums than the one bought at older ages. Thus, purchasing a term plan early allows you to focus on other financial goals and responsibilities while planning for an eventuality.

2. A higher sum assured

Apart from lower premiums, buying term insurance at a young age allows you to benefit from a high sum assured that can extend up to a 1 crore term insurance. It is because young people are less risky for the insurance provider due to fewer health issues. A high sum assured can help your loved ones fulfil their dreams even after you.

3. Optimum financial coverage for loved ones

Usually, young people tend to have more debts like education loans, credit card debt, car loans, home loans, etc. The burden of these debts might fall on your family if anything unfortunate happens to you. Moreover, it can be problematic if you are the sole breadwinner of your family. But if you have a term insurance plan, your family can settle your debts without losing their assets.

4. More beneficial than a group term life insurance

As a young working professional with a group term plan, you may not feel the need to buy an individual term policy. But you must know that group plans usually terminate with your job and offer a lower sum assured. So, individual term insurance is necessary, besides a group plan to safeguard your loved ones’ future.

5. Tax benefits

The death benefit of a term insurance plan is tax-exempt under Section 80D of the Income Tax Act, 1961, allowing your dependents to benefit from the entire sum assured. Not only this, you can avail of tax deductions up to ₹1.5 lakh on the premiums paid in a year. Thus, term insurance at a young age allows you to benefit from tax deductions for several years and increase your other savings.

Conclusion

A term insurance plan must be a top priority when you are earning. It allows you to build a strong financial foundation which protects your loved ones against life’s uncertainties. As you are young and healthy, there are fewer chances of policy rejection. Also, many lenders offer loans against term plans. So, if there is any right time to secure the financial future of your dependents with a term plan, it is as soon as you start earning.

With PNB MetLife, you can buy suitable term insurance and secure your loved one’s future in your absence. So, go ahead and invest today.  To know more, please read the relevant articles at our website www.pnbmetlife.com.