Why buy life insurance at an early age?
This is a common thought amongst the younger working group. Investing early can help you build a sizable corpus. It is the right age to explore your finances. You have the benefits of compounding your investment by starting early. You have better access to lower premiums and higher coverage.
Why buy life insurance is a question that often ponders your mind.
It justifies the following reasons:
- Early unexpected death
- The longevity of your life with more liabilities
A life insurance plan covers long-term expenditures, such as:
- Financial support for the family at the time of your death
- Meet expenses for your children's education
- Savings for your post retirements
- Financial stability at times of illness or accident
- Support other contingencies and requirements
Anyone who is a breadwinner requires life insurance. The amount depends on family size and lifestyle. Choose the right plan, depending on your affordability and your needs.
The plan enables you to fill your different needs. It is the right tool to help you settle down in life in your 30s.
There are options to choose if you start to invest early in life. The term plan and permanent plan are two main features. The term plan covers anywhere from five to 30 years. It is meant for a set term. It allows death benefits to beneficiaries in case of untimely death during the term. A term plan is known for its lower premium.
In a permanent plan, the premium is paid throughout your life. Thus, the plan covers you as long as you pay the premium. The plan does not expire. It has both death benefits and savings benefits.
Some term plans can be converted to a permanent plan. The permanent plan is favorable to tax treatment.
In the Right Direction
The majority of the consumers agree that they enjoy life more by financially protecting their loved ones. There has been an increase in awareness of insurance products.
A survey conducted recently showed an awareness of term products up to 50% among the millennial parents.
Life Stage Goals
Parents achieve a few milestones in their various stages of life. A sound financial plan gives protection to:
- Support for higher education for their children
- Other expenses, such as children's marriage
A total protection plan can:
- Replace income that is lost through an untimely death. This applies to dependent adults like parents and adult children
- Able to cover funeral and burial costs
- Beneficiaries can inherit the policy benefits
Besides protecting the family, life insurance caters to businesses. The untimely death of a key employer can cause businesses to close down. A company-owned protection plan helps to keep business afloat after the death of the owner. The insurer pays the death benefits to the company. The benefits can be utilized to pay debts or cover other losses.
Story of Peter's Company
Let us see how Peter's company survived. Peter owned a company in his 20s that was at its cutting edge. He had many employees under him, but he was an integral member of the team. He was the brain behind the breakthroughs of the company. Soon the company realized that it would suffer financial loss in his absence. Peter decided to invest in a plan to protect his company. As things began to take shape, Peter had cancer. He died within a few years of his policy into effect. The company's sales plummeted soon after his death. The death benefits of the company owner helped the business to run for the next 12 months. A new replacement for Peter could be done, and business was back on track.
This story should strike a chord in considering buying a policy.
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