Life insurance is more than just a purchase. It’s a safety net that helps protect your loved ones and keeps you afloat when times are tough. So, let’s explore in greater detail why life insurance is so important.
Young Adulthood
Life insurance may seem unnecessary when you’re in your 20s or even in your early 30s. This is because you may be in great health at this time. Yet, it is the best time to actually purchase life insurance. Most insurers will give you the lowest possible premiums for the highest possible coverage if you’re young and healthy. This means that you can lock in a reasonable premium amount for the entire policy term.
If you have student loans co-signed by your parents or if they depend on you financially, life insurance can protect them from those financial burdens if something happens to you.
Starting a Family
Your financial commitments naturally go up once you start a family. This stage means more allocation of your income towards paying for your family’s needs, lifestyle, regular costs, education, etc. Getting life insurance is thus important to financially secure your loved ones’ future in case something unfortunate happens to you.
At this stage, term life insurance is highly recommended as it provides significant coverage with affordable premiums. If you have children, you can also consider child-specific plans or other policies designed to save for things like their education.
Mid-Career
Once people hit their 40s and then 50s, they have to keep saving for retirement while paying for family and household costs, mortgages, and so on. This is a good time to review one’s life insurance plans and requirements.
With rising income comes the need for higher financial security. Increasing your coverage represents a kind of guarantee. No matter how those needs evolve in the future, your family will not be left unsupported. Insurance policies that have both savings and investment features can also help you prepare for major goals. It can help buy a second home, cover college fees, or pay for your child’s marriage.
Retirement Stage
In retirement, your financial goals change. Your children may now be financially independent, but you still want to leave them with a secure legacy. At the same time, you also want to ensure security for both your spouse and yourself.
Life insurance can be a godsend at this life stage, enabling a stream of income to take care of medical bill payments, day-to-day household expenses, and unexpected costs as well. It is thus ideal for estate planning, enabling your loved ones to inherit wealth without complications or liabilities. Death benefits from insurance policies in India are tax-free under Section 10(10D) of the Income Tax Act.
The Best Time to Buy Life Insurance
Life moves pretty fast, and every phase of life has its responsibilities. Life insurance makes certain you are ready for all of them. Therefore, no matter which stage of life you are in, the best time to buy life insurance is right now.