One of the smartest financial planning moves is to buy a Life Insurance Policy. Now it’s a big myth in India that once you turn 40 or 45, then actually you need life insurance and for many, singles talking about life insurance is considered as the funniest people on this planet. But the reality is far away, and much bigger from the myths and that is why let us run down on four imperative reasons why singles need a Life Insurance policy too:
REASON 1: Cost Effective Premium
Majorly in India, people are single in their 20’s. At younger ages, people are considered to be more healthy and hearty. The premiums of the life insurance policy depend on many factors like age, personal history, family history, occupation and much more. Purchasing a policy at an early age will offer you higher coverage or sum assured at the minimum premium cost.
Insurers will consider you as a “healthy life” and will give you lower premium rates considering lower risk in your profile and charge lower mortality rates. The premiums for the life insurance policies are level premiums (unless you have specifically opted for increasing premium option) and the same amount of lower premium you have to pay throughout the tenure of the policy rather waiting to buy at a later stage when it becomes much more expensive, and you may become uninsurable.
REASON 2: Financial Protection for your loved ones
Being single does not refer to being alone. You have parents and siblings to take care of. Life is full of uncertainties, getting insured when you are single will give a financial security and indemnification to the people around you whom you love so much. Buying a life insurance is a responsible decision, the sooner it is taken, the better it is. Also, you will get married in some years down the line; you will have expansion in your family. The responsibilities will elevate with growing years. But you can bank upon the life insurance policy that you have bought at the right stage to provide financial protection to your loved ones around.
REASON 3: Inculcation of Saving Habit
Life insurance policy is a long-term contract with the insurer where you are being the insured has to pay regular premiums for the same, to keep it active. Saving a fixed amount of premium for your policy will inculcate a regular saving habit within you, and you will plan all your expenses accordingly. Constant savings over an extended term will ensure a robust corpus, which will cater to the financial requirements at various stages of life. Regular saving habit will make you more responsible and prudent in your decisions.
REASON 4: Tax Benefits
The Life insurance policy offers tax benefits under section 80C of the Income Tax Act for the premium paid. The maximum tax deduction which can be availed under section 80C is Rs 1.5 Lakhs. Also, the maturity proceeds are tax-free under section 10 (10 D) based on plan-related conditions.
REASON 5: Safe Investment with bundled benefits
Life insurance is a safe investment tool as compared to other investment options like investing in equities, mutual funds which are subject to market risks. Traditional life insurance policies will eliminate the risk factor in your investment, providing you a guaranteed return. Also, your life insurance policy offers you additional benefits which are:
- You may take a loan against your life insurance policy
- Your life insurance policy may act as collateral to secure various other loans
- You can make partial withdrawals from the accumulated amount of your policy to meet urgent financial requirements.
So get going and enjoy the wonders of being single by taking the right decisions. Prudent financial decisions taken at this stage will prove fruitful in the future.