Myth Buster: Why is it important to have a term insurance when you are single?
So you are a ‘happily unmarried’ person who denies the idea of buying a term insurance by citing reasons like I have no wife or kids, or financial liabilities. But being unmarried doesn’t mean being alone. Therefore, irrespective of your marital status, you should buy a term insurance because of the following reasons:
1. There are term plans that cover your health too:
Usually, youngsters think as they are young, the chances of them falling ill are low. But do you know, in India, 30%-35% of heart attacks happen to people under the age of 45? In a race to stay ahead in the competition, the generation Y has put its health on the back seat.
According to a survey conducted by Indus Health in Bengaluru, 25%-30% youngsters in the city are under the threat of oral cancer. The odd working hours, poor dietary habits, coupled with drinking and smoking, have worsened the situation. Not only cases of critical ailments, but the prices of medicines have also increased in the country. The government has withdrawn the exemption on custom duty on certain drugs, which make life-saving imported drugs for cancer, cardiac failures and HIV costly.
Remember, diseases know no age, creed, race or color and they can strike anyone. So, what would happen if you are also diagnosed with a critical ailment? Do you think either you or your parents would be able to bear hefty medical expenses? Or worse, if you lose your job due to disease; do you think your family would be able to handle all medical and other expenses alone?
So, instead of getting scared of these questions, you should buy a term insurance plan that offers critical illness benefit. In case you are diagnosed with a critical ailment, the insurer will pay critical illness benefits to meet medical or other expenses.
2. You will have to pay more later: Most of the youngsters who have just started their career would be extremely conscious about how much money they spend and what value they get out of it. With limited money in hand, they deny buying the term insurance as they think there are other items which are more ‘important’ than the insurance policy. But they should understand that by delaying the purchase of term insurance policy, they will actually spend extra money in the future. As the premium of a term insurance majorly depends on the age of the person, it is good to buy it when you are young and healthy.
Unlike health insurance policy, the premium of a term insurance policy remains fixed throughout the policy tenure. It means, if you buy the policy now, you will be paying the same premium five or seven years down the line when you most probably would get married.
Here’s the case of Ajay who will pay a higher premium if he delays the idea of buying a term plan for five years.
|Term Cover||Rs 1 crore||Rs 1 crore|
|Tenure||30 years||30 years|
|Term policy bought at||25-year||30-year|
|Premium (in Rs.)||6,914||8,945|
Also, as you grow old, you become more susceptible to health issues and which makes it difficult to get a term insurance. After marriage, you can make your spouse the nominee in your term insurance plan. So, irrespective of your marital status, buy a term insurance now to get low premium rates.
3. Repayment of financial liabilities: Your father might have taken an education loan to finance your education. Once you get the job, it becomes your responsibility to repay the loan. Therefore, it makes sense to buy a term insurance cover so that the money can be used for repayment of education loan in case something unfortunate happens to you.
4. It gives tax benefits: Besides offering financial protection, a term insurance policy also gives double tax exemptions to lower your tax outgo. Under Section 80C of the Income Tax Act, the premium paid on the insurance is eligible to get a deduction for up to Rs 1.5 lakhs. Additionally, you can get tax benefits for up to Rs 25,000 under Section 80D for critical illness benefits. Further, benefits received by your family in case of your death are also tax-free. For a salaried professional, these tax benefits are like icing on the cake.
If all this talk is starting to make you think that you should buy a term insurance, it’s time to take an action. A 25-year non-smoker needs to pay only Rs 4,226 to get Rs 50 lakhs coverage under term insurance. Further, buy term insurance online with a click of the mouse from anywhere in the world. In this way, you will not only save your time but money also. A youngster who has just started his job, online mode is a great money saver technique.