You feel on top of the world when you get your very first job or a considerable salary increase. Naturally, the thought of buying a fancy phone, taking a vacation, or even assisting your parents comes to your mind. But nowadays, young earners in India are indeed doing something different. Besides giving in to their desires, they are securing a large financial safety net for their families. They are getting term life insurance plans.
Have you noticed a particular figure almost everywhere in India? That number is 1 Crore. Young people who are just 25 or 30 years old are picking a term plan for 1 crore. Why is this specific plan so popular in India right now? Let us look at the reasons in the simplest way possible.
1. It’s Cheaper Than A Slice Of Pizza
The main reason youngsters are crazy about this plan is the price. When you are young and healthy, insurers perceive you as a low-risk person. So, they allow you a large sum insured for a very nominal premium.
By paying anything between 800 and 1200 Rupees a month, a healthy 25-year-old can obtain coverage of 1 Crore. That’s way less than your weekend movie outing or a taco pizza! The kicker? The price remains fixed for life. Buy it now and, even after 20 years, you will be paying the same small amount.
2. Big Protection for Big Dreams
When you begin to live on your own income, naturally, your plans for big things take shape. Maybe you will decide on getting an education loan or a loan for buying your first car, and later on, you will think of a mortgage for your house. Indeed, loans are a handy way of fulfilling your dreams, but at the same time, they are a serious responsibility. So, if something were to happen to you, who would be the one to repay the bank?
After all, you’re not going to want your mum and dad or your spouse to be the ones dealing with such a dreadful situation, are you? A ₹1 crore cover is literally a huge sum of money and financial security. If, unfortunately, you have a lifetime event, it automatically goes as your bequest to your loved ones.
They can instantly use this money to get rid of their loans. It not only protects them from bank reminders and stress but also saves them from undergoing a lot of worry.
3. The Monster Called Inflation
Inflation means that the price of things gradually becomes expensive. Just picture this: a cup of tea or a gas cylinder is in fact much higher today in price than it was ten years back. Every year, the amount of money required to live in a comfortable way increases.
If you opt for a small coverage amount like 10 Lakhs or 20 Lakhs, at present, it may seem like a large amount. However, after ten or twenty years, that amount will hardly be sufficient for running a household or financing a child’s education. A cover of 1 Crore is a fairly wise option. It provides a cushion against the increase in costs of milk, school fees, and medical treatment for a considerable length of time.
4. It Fits the New Indian Family
The concept of family is everything in India. A lot of young workers are the only source of support for their parents. A few are the only breadwinners in the family. Besides, many young people have moved to big cities where the living expenses are very high.
If the main earning member is absent, the family’s daily routine may be disrupted completely. A 1 Crore policy is like a very sturdy wall. It ensures that your parents can get their medicines, your siblings can complete their education, and your family can continue to live in the same house without making any sacrifices.
5. It Gives Pure Peace of Mind
There are various types of insurance policies available in the market. A few policies even promise to return your money with some additional amount. However, those policies are very complicated and cost you a lot of money for a very small sum insured.
A term plan is a very simple one. It is just a protection plan. You pay a very small amount, and the insurance company makes a promise that your family will get a big amount of money when you are no longer around. There are no complex calculations or hidden terms. It is very simple and clean and, most importantly, a highly trusted plan. Being assured that your family is taken care of will give you a lot of peace, which will also help you concentrate on your job.
6. You Save Money on Taxes
Everybody enjoys saving money, and the government even supports you in this when you buy insurance. The amount spent by you on your term cover can lower your annual taxable income. As per the old tax slabs of India, you are eligible for the tax deduction on the life insurance premium paid for up to 1.5 Lakh Rupees in a year.
Additionally, if the family is fortunate to get the 1 Crore payment, the whole amount is completely exempt from tax. It is a great opportunity for any young working person who wishes to protect their earnings from taxation.
The Right Time is Right Now
When it comes to life insurance, your youth is your greatest asset. If you put off buying it till the age of 40, then the price of the same policy may double or even triple. On the other hand, your health might deteriorate, and you won’t be able to get any insurance policy.
Getting 1 Crore coverage in your 20s or early 30s is a wise financial decision. It is easy and very cheap, and also, you are showing that you care for the people relying on you. Today, you cannot give anything more valuable than security, which is free from worry and uncertainty to your family.
