Some of the most common objections given by individuals for delaying the purchase of life insurance include “I don’t need it”, “I will ask my wife/CA/parents”, “I will buy it later” or “It’s too early for me to buy life insurance”.
However, delaying purchasing life insurance plan could cause huge financial burden for the family in the event of personal loss or mishappening and be regretted at a later stage.
Abhishek Misra is the CEO & Principal Officer at Bonanza Insurance Broker Pvt Ltd highlights top 3 major reasons why it is important to purchase life insurance as early as possible in life:
Life insurance premiums are cheaper when you are young
Life insurance premiums are determined by life insurance companies using the process of underwriting by taking into consideration factors like your age, gender, occupation, lifestyle, policy tenure, any history of diseases in the family etc.
Life insurance premiums cost less when one is young as the risk factor of untimely death is significantly lower compared to those in higher age groups.
By purchasing a life insurance policy at a young age for a low premium, one can continue to pay the same premium for the entire policy term.
You may be denied life insurance at a later age
With growing age, health problems also tend to increase. In case of any serious illness or accident, the life insurance company may reject the insurance proposal at a later age. Hence, it is very important to buy life insurance when you are young and healthy.
You are putting your family at risk
The demise of the family’s breadwinner also means loss of income for the family. In such a situation, the family would be forced to compromise even on their basic needs or resort to the sale of assets like property or jewellery for survival.
There are many investment options available in the market. However, life insurance is the only investment which offers a high-risk cover for a nominal premium amount.
To understand this with the help of an example, if one purchases a life insurance policy of Rs 50 lakhs by paying a nominal monthly premium, the risk cover starts from day one.
In case of the unfortunate demise of the policyholder, his/her nominee would receive the sum of Rs. 50 lakhs as a part of the death claim.
On the other hand, in the case of other investments like PPF or FDs, the nominee would receive only the amount invested plus interest applicable.
Life insurance is a must for all those with dependents. By purchasing life insurance at an early age, one can not only ensure financial protection for their loved ones but also save money on premiums.
Most importantly, life insurance ensures peace of mind as one can be assured that his/her family’s financial needs will be taken care of, even under adverse circumstances.
(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)