Many single people are the sole breadwinners in their families or have dependent parents whom they may support financially. Read on to find out the key benefits of term plans that are useful for single working professionals.
Whether you’re a young single working professional whose parents are financially dependent on you, a single working parent with a dependent child, or a single person without financial responsibilities, you need to buy life insurance to protect your family in case of untoward life events. You may think you don’t need a term plan as a single 25-year-old, but one day you may decide to get married and even have a family of your own. Hence, buying life insurance early on will be more affordable than buying it as a 32-year-old. People today may be delaying marriage and choosing to stay single for longer, but that doesn’t mean one should delay being financially vigilant.
So, here are five reasons why even as a single person you must have life cover:
1. Avail lower premiums if you buy early: Many single people are young, and most of them are probably just getting started with their first job. So, it is best to buy a policy earlier. Life insurance is quite affordable for healthy young adults in their 20s; as premiums tend to increase with age. For example, if you are aged 25 years, a non-smoker and want to purchase, say, a Rs 50 lakh term insurance cover for a term of 35 years, then your premium per annum will be Rs 7,742 (including taxes as applicable). In case your age is 32 years, then for a policy term of 30 years for the same cover you will have to shell out Rs 10,844 annually. Therefore, the higher the age, the higher the premium.
That’s not all. As you grow older, your chances of being affected by hereditary diseases or age-related health issues are also higher. This, in turn, leads to a rise in insurance premiums. Life insurance can then become prohibitively expensive or even impossible to obtain if a major health problem crops up later. Term plans are a simple form of life cover, and offer pure protection. Some plans even offer an option to increase the cover every year.
2. Protection for every life stage: Many single people plan to get married and have children once they achieve certain career or life goals. Therefore, term insurance bought when you’re younger comes in handy when you reach this stage of life. In fact, there is no reason to be worried if the cover proves to be inadequate. You can modify the cover as you progress to the next stage of your life.
3. Get all-around coverage: Every individual is exposed to the risk of death, disease, and disability. However, the current generation is at an even higher risk as compared to their parents and grandparents due to their reckless lifestyles. Thankfully, term plans offer several riders such as an accidental death rider and a critical illness rider for optimal coverage. For instance, if one opts for the accidental death rider, the beneficiary is paid an additional sum if you die in an accident. In case of being diagnosed with any chronic illness or condition, you’re paid a pre-decided sum assured when you opt for the critical illness rider.
4. Save tax: Who doesn’t want to save tax? While there are multiple modes for saving tax, life insurance can prove to be an effective tax saving instrument. Insurance premiums are tax deductible and the payouts are tax-free. For instance, premiums paid towards a life cover can be claimed under Section 80C up to a maximum amount of Rs. 1.5 lakh per year. And, the payout on the policy attracts no tax under Section 10D of the Income Tax Act.
5. Cover liabilities at every stage of life: Different people have to deal with different types of liabilities. For some, it’s an education loan, housing loan or a car loan; whereas for others, it could be medical expenses for their elderly dependent parents. A term plan is suitable in these cases, where such individuals can cover the risk of their untimely death before repaying all loans by buying a term plan. No matter which loan one is liable for, it’s good to be protected by a term plan. The comfort of having a protection shield like term insurance enables you to devote your financial resources to other areas of your life. Moreover, term plans cover one’s life at a nominal cost from day one of policy issuance compared to other financial avenues where your investment takes time to grow into a sizable corpus.
Most single, working professionals these days are hard-pressed for time. Thankfully, the process of buying a term plan online is now simple and quick. And, it’s also more affordable. For instance, an insurer like HDFC Life gives a discount of 5.5% on premiums for online purchases on all its nine plans under the HDFC Life Click 2 Protect 3D Plus policy. In a nutshell, term plans offer several benefits and features depending on your individual needs. They’re perfect for protecting your loved ones from financial losses and securing their future in case something untoward happens to you.