Urban Indians are more likely to buy life insurance policies after the birth of a child in their family. According to the survey, 52% of households with children understand the need to purchase life insurance, compared to 29% of those without children.
Conventional wisdom recommends purchasing life insurance in one’s latter years. However, to protect the significant milestones in their lives and the lives of their loved ones, people of all ages should recognize the need to include a life insurance policy in their financial portfolio.
One of the most frequently asked concerns about life insurance is whether there is a good time to invest in a life insurance policy. If you are 23 and recently employed in an organization, should you have a term life insurance plan, or should you wait till 25 until you can build that corpus? Given the uncertainty instilled by the Pandemic, the answer to that question is: the earlier, the better. However, if you have not yet purchased life insurance coverage, there is still time!
Let’s look at how a life insurance policy might safeguard you financially at different phases of your life.
18 to 25 years: You have recently entered adulthood and must be pursuing higher education or have just started your first job. You are in excellent health, with no dependents and few, if any, duties. While purchasing life insurance or a term life insurance plan may not be on your priority list, you can obtain a policy with a more significant sum assured at the lowest premium rate for the reasons outlined above. The absence of liability or disease makes you a low-risk investment for the insurer, who may easily provide you with a lower premium rate than someone 10 or 20 years older. Furthermore, you will anyhow need to get an insurance policy later in life, so it makes sense to invest in one early on in order to be protected for a more extended period and at a reasonable cost. At this time of life, investing in a simple term life insurance plan with the added benefit of increased coverage can be beneficial. In such a term plan, as your responsibilities increase over time, so does the amount of coverage provided. This guarantees that you are fully prepared for what comes ahead.
25–35 years: People in this age bracket have either recently married, are preparing to marry, or are already settled in their marital life. They take on more responsibility as either the breadwinner or co-earner for the household and at work. They also aim to achieve their financial goals and milestones. For example, someone may have taken out a loan to buy a car or be paying off a loan on their dream home. Considering your financial liabilities are mounting by the day, now is an excellent time to invest in a term life insurance plan to protect your family members from the strain of repaying your debt in the event of your untimely death. Aside from that, the necessity to increase your wealth and prepare for future duties also looms huge at this time. At this stage, a unit-linked life insurance plan (ULIP) can help you grow your wealth while also safeguarding your loved ones. Since you are young, you can afford to take risks and be an active investor; you can invest in equities funds through your ULIP to significantly increase your wealth.
35-45 years: In your late thirties, your family is growing in size as you welcome your children into the world and become proud parents. This also means that the number of dependents grows, as does your sense of obligation to them. You will be managing the household budget and, at the same time, parking money for your children to receive the best education while simultaneously caring for your elderly parents and their medical needs. At this age, the importance of saving for your loved ones’ future is more significant than ever. And so is the need to shield them from any uncertainty that may occur in your absence, leaving them financially vulnerable. This is especially true if you are the only earning member of the family.
Even if it is late in life, one must recognize the importance of purchasing life insurance or a term life insurance plan to provide a secure future for one’s loved ones. At this stage, your best option is an endowment plan. An endowment plan also allows you to increase your wealth while ensuring your family’s financial security. Since an endowment plan is more risk-averse than ULIPs, it will enable you to build a risk-free portfolio.
Over 45 years: If you’ve worked for a long time, you may be looking forward to retirement. The income you get during your active working life will stop once you retire. Even in your later years, a comprehensive life insurance plan is required to prepare for retirement and ensure that your spouse is well cared for in the event of your absence. In this instance, an annuity plan that helps you develop a retirement fund while also providing life insurance can be the ideal solution.
In conclusion, many life insurance plans on the market take into account your age and align with your objectives accordingly. To put it simply, the time to invest in life insurance is now. Each life stage brings its own set of obligations, and life insurance allows you to be prepared for any eventuality, providing a financially secure future for your family. So, become a policyholder today to ensure long-term protection!
Published by: Khy Talara
