We all wish to have a secure and prosperous future for our family and ourselves. However, life is not certain. A mishap, disease, or unanticipated incident can undermine our financial standing. Though we cannot be certain of what would occur tomorrow, we can take care of it today. One of the wisest steps to take to assure your family’s financial security is purchasing the right insurance policy at the right time.
When it comes to financial protection, two common terms often come up: term insurance and life insurance. Many people consider buying insurance later in life, but experts advise that purchasing term insurance early is a smarter move than waiting to buy life insurance later. Here’s why starting early makes all the difference.
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What is Term Insurance?
Term insurance is the easiest and most budget-friendly form of insurance. You give a fixed sum, termed a premium, to the insurance company. In return, if something untoward happens to you within the policy term, your family gets a lump sum amount (referred to as a death benefit). This enables your loved ones to handle costs, repay loans, or maintain their living standard without worries.
Traditional life insurance often combines protection and savings, which can make it more expensive. Term insurance focuses only on protection, which keeps it affordable, especially when purchased early.
Why Buy Term Insurance Early?
Many people delay to buy term insurance because they feel young and healthy. They think, “I will buy it later when I’m older or earn more.” However, waiting can be a costly mistake.
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- Lower Premiums When You’re Young: Young and fit individuals are low risk as far as insurers are concerned. You pay significantly lower premiums than you would if you purchase a policy later in life or even when you are not healthy.
- More Coverage for Less Cost: Purchasing insurance early helps you get larger coverage at a lower premium. For instance, with the same finances, you can obtain a ₹1 crore cover at 20, but the same amount could only provide a ₹50 lakh cover at 40.
- Immediate Financial Protection: When you purchase term insurance early, your loved one’s financial future is secured from day one. Paying off loans, household expenses, or funding your child’s education: term insurance provides peace of mind.
Starting early is not only economical, but also sensible. Delaying the purchase of life insurance later in life usually results in paying higher premiums and less coverage.
The Power of Time
Purchasing term insurance at an early stage is similar to planting a tree. The sooner you plant it, the more robust and larger it will be in the long run. An early beginning similarly results in reduced premiums and extended coverage, which secures your family financially for years.
Term Insurance vs. Life Insurance
Term Insurance is pure protection. You pay low premiums and receive high cover. In case something untoward happens to you during the term of the policy, your family receives financial aid. There is no maturity benefit if you survive, but that’s because maximum protection is the focus.
Life Insurance, such as endowment or whole life policies, infuses protection with savings or investment. Such plans are more expensive and may give lower coverage at the same premium as term insurance.
If the protection of your family is your only concern, term insurance is the most suitable option, particularly if purchased early. When your income increases later, you can consider other life insurance policies for savings and investments.
Advantages of Early Start
- Low Premium Lock-In: Purchasing early fixes your premium at a lower cost for the entire duration. Waiting results in higher payments for the same coverage in the future.
- Health Advantage: Younger purchasers tend to be healthier, and thus policy sanction is more likely at favourable rates. With ageing, disease conditions like diabetes or high blood pressure can raise premiums or lead to rejection.
- Longer and Better Coverage: An early start provides you with financial security for a more extended period, encompassing your most important earning years.
A Real-Life Example
Two of your friends, Neha and Rahul, both 25 years old, make different choices. Neha invests in term insurance right away and pays only ₹500 per month for a ₹1 crore cover. Rahul waits and invests in life insurance at 35 years old. He pays ₹1,200 per month for the same cover. Neha not only saves money but also gets 10 more years of cover than Rahul.
How to Buy Term Insurance?
Purchasing term insurance is easy today:
- Calculate Your Requirements: Think about loans, monthly bills, and long-term goals such as your child’s education.
- Compare Plans: Opt for policies with good claim settlement ratios and reputable insurers.
- Pick Policy Term: Most of us opt for coverage till 60–65, the years of earning.
- Online Purchase: Online policies are cheaper and more convenient to buy.
Conclusion
Life is full of surprises, but your financial future doesn’t have to be. One of the wisest money moves you can make is to purchase term insurance early. It is cheaper, provides more protection, and guarantees your family’s financial security.
If you postpone purchasing life insurance until later, you could end up paying more premiums and with less protection. Don’t wait. Purchase term insurance early and protect your family’s tomorrow today.
