Benefits Of Buying Life Insurance In Your Twenties

Being in your 20s means being full of optimism, energy, and hope. It’s during this time that you discover what life has to offer: a world full of abundance, beauty, and unlimited experiences. It’s the time when you are setting course for a successful professional and personal space. Life seems fun, carefree, and full of big dreams and milestones. And buying a life insurance policy might not be one of your priorities. However, in this article, we’ll give you some really good reasons why you must think differently. Because if you have financial dependents or unsettled loans - the best age to buy a life insurance plan is, in fact, when you are young.

6 Benefits Of Buying Life Insurance In Your Twenties

If you need to buy it, here are some solid reasons to buy it early in life -

Premiums Are Cheaper When You’re Young And Healthy

Generally, when you are young, you are fitter and healthier compared to an older person. And without underlying health conditions or ailments, you can lock in really low premiums. Premiums are important because once you buy the policy, they are set for life. So for the same coverage, if you plan to buy it early, you will need to pay less in comparison to someone who opts for it later in life. Also, when you are young and healthy, your life insurance proposal may be approved at standard prices. You can take the cover for a long term, and continue to stay protected at a low cost.

Takes A Financial Load Off Of Your Family

You may have taken a student loan for your higher studies. Or a business loan to build your startup. In case you pass away before settling those loans, the burden will befall your parents or siblings. Or if you are married, have taken a home loan, and unfortunately pass away before repaying it, your spouse will have to pay it off on their own, or lose the house altogether. You do not want that. Life insurance protects your loved ones from all those forlorn situations.

Creates A Disciplined Savings Habit

If you are in your twenties and lack the discipline required to save your money, you can consider investing in a life insurance plan. As you start investing early in life, you can develop a disciplined habit of saving money and preserving your wealth. Life insurance helps you accumulate wealth with Saving Plans. These are plans that give you the dual benefit of a life cover as well as savings. If you don’t survive the policy, you receive the sum assured (Death Benefit). And if you do survive it, you receive a lump sum amount (Maturity Benefit). Policies like Money Back Plans, also give you regular payouts (Survival Benefit), to help you fulfil your short-term goals.

Keeps You Ready And Secured For Big Future Milestones

As you grow older, you probably want to get married, have children, and create a family of your own. You want to buy your dream home, a good car, save up for your children’s education, and so much more. And for all those big milestones that life brings your way, you need to be financially prepared. As we mentioned before, saving plans really save the day. The lump sum that gets accumulated (Maturity Benefit) or the steady payouts you receive - depending on the product - will help you achieve your financial goals and key milestones. For example, ABSLI Guaranteed Milestone Plan helps you fulfil all the important, non-negotiable life goals, like - your children’s higher education. On the other hand, ABSLI Vision LifeIncome Plus Plan gives you a regular guaranteed income to help with your short-term obligations, like - settling rents and loans.

Helps Generates High Returns

Life insurance savings products provide attractive returns on the money you invest. Investments in these products work on the principle of compounding - and the longer you invest in them, the more magnified will be the returns. So, if you invest at a young age, you’ll earn more returns because of the power of compounding. One more benefit of investing early in life insurance policies is lower mortality charges. Basically, insurance companies levy a ‘mortality charge’ for providing an insurance cover to you. And, the mortality charges increase as you grow older - and are low if you buy the plan at a young age. Lower mortality charges imply that a larger portion of your premium will be invested, allowing you to earn higher returns.

Saves Taxes

No matter how old you are, one thing that remains constant is the tax you have to pay. You will have to pay income tax if your income exceeds the exemption limits. Now, in your twenties, you might be up for one promotion after another. These might frequently be accompanied by pay raises. And, you may find yourself in a higher tax bracket after a certain point. Purchasing a life insurance policy will assist you in saving taxes. Though it is definitely not the primary reason to buy a life cover, tax advantages are a sweet added advantage. As per Section 80C of the Income Tax Act, 1961, you can get tax deductions of up to Rs. 1,50,000 on the premiums you pay every year. And as per Section 10(10D), the maturity benefit or the death benefit you or your nominee will receive at the end of the policy term is completely exempted from taxation.

Wrapping Up!

Being in your 20s means being full of optimism, energy, and hope. It’s during this time that you discover what life has to offer: a world full of abundance, beauty, and unlimited experiences. It’s the time when you are setting course for a successful professional and personal space. Life seems fun, carefree, and full of big dreams and milestones. And buying a life insurance policy might not be one of your priorities. However, in this article, we’ll give you some really good reasons why you must think differently. Because if you have financial dependents or unsettled loans - the best age to buy a life insurance plan is, in fact, when you are young.