First Paycheck? Invest In Your Future With Life Insurance Now

Getting your first paycheck is a significant life milestone. You’ve worked hard, got selected for your dream company, and have your first salary credited to your account. Surely, there might be a list of things you’d want to do with this money.

But amidst all the excitement, don’t forget that the newfound financial independence also means careful financial planning – not just for you but for your loved ones too. Investing in life insurance right now is a smart move to financially secure your loved ones while enjoying lower premiums as you build a safety net over time. 

What Is Life Insurance ?

Life insurance is a contract between you and an insurance company where they pay your family a predetermined amount after your demise. 

For example, suppose you opt for a term plan worth ₹1 crore for 65 years. To continue the life insurance benefits up to this time, you’ll have to pay a fixed premium at regular intervals. Now, in case of your untimely demise within this policy term, your beneficiaries will receive a payout of ₹1 crore, ensuring their financial security even when you’re not around anymore.

Reasons To Start Life Insurance Early

Rohan decided to invest in a life insurance term plan at the age of 23. With lower premiums due to his young age, he secured a comprehensive term plan worth ₹2 crore at cost-effective rates. Over the years, as his financial responsibilities increased, he secured his family’s financial future and continued to enjoy substantial coverage at the same affordable rate.

Priya, on the other hand, waited until her late 30s to buy life insurance. Due to her age, the premiums were significantly higher and she had to settle for a lower coverage to ensure she could afford the premiums. 

The stories of Priya and Arjun highlight the importance of purchasing a life insurance term plan early. 

Here’s why:

• Lower premiums

As seen in the case of Priya and Arjun, one of the major life insurance benefits of starting early is affordable premiums. This is because young individuals are typically healthier, reducing the risk of insurers. This results in lower premiums, making life insurance term plans more affordable. Here’s a simple table to understand this better:

• Easier qualification

As a young individual, you typically have fewer health complications, making it easier to qualify for life insurance. As your age increases, you become more susceptible to health issues, which can complicate the application process. As a result, you may require additional medical tests, resulting in higher premiums or exclusions.

• More time for your money to grow

In market-linked plans like Unit Linked Insurance Plans (ULIPs), a part of your premium is invested in the market. By starting these investments early, you can benefit from the power of compounding. This means that as your returns grow, they also make more returns over time. This can significantly increase the value of the investment portion of your life insurance plan, ensuring a hefty corpus during the policy’s maturity.

• Tax benefits until retirement

Life insurance premiums are eligible for tax deductions up to ₹1.5 lakhs under Section 80C of the Income Tax Act.^[1] By purchasing a policy right at the start of your career, you can enjoy these tax benefits over a more extended period.

• Plan for uncertainties

Life is unpredictable. Investing in a life insurance policy early allows you to be prepared for unforeseen events. Whether it’s a sudden illness or an unexpected accident, having life insurance in place ensures the financial future of your loved ones is protected, regardless of what life throws your way.

Key Takeaways

Buying life insurance at a young age is a smart financial decision for the long term. But to make an informed decision, it’s important to consider factors like your income, lifestyle, potential future dependents, existing debts, etc. You can also explore additional riders like critical illness or disability riders to ensure comprehensive coverage for your needs.

Consider platforms like PhonePe for a seamless and hassle-free insurance purchase experience.