Life is uncertain. The celebration of Dussehra turned into mourning in Amritsar, Punjab on October 19, 2018. The number of people including children is not certain but reports suggest more than 60 deaths and many injuries; two young men who had joined the workforce in early 2018 were also among the deceased.
Both families were shattered by the loss of their young earning member and their hopes and dreams and expectations of a better life, tied to these youths. The only difference was that one of them had opted for a term life insurance policy immediately after he landed the job whereas the other, believing that he would live a long life, opted to invest in other financial instruments first. With too many savings and investment options floating around in the market, a person with the sole responsibility or with shared responsibility of raising a family is always concerned with investing their money in the right place. Investment shouldn’t be just limited to the ones with a family to look after, but also to those who are single with fewer responsibilities and have just started earning. It is important that we start considering saving or investing our money to reap benefits later; the younger and earlier you start — better the benefits you reap later. Just like a wise man once said, “A stitch in time saves nine”.
Life insurance is one such financial product, in which you pay premiums over a period of time and reap benefits later. Favourable demographics and new product launches could propel India to become one of the leading insurance markets in the world by 2020. Life insurance products are designed to help you replace lost income or pay for additional needs of your family if you are not around. It should usually be the first priority in an earning person’s portfolio.
There are some common excuses that young working professionals in their twenties give for not investing in a life insurance policy. The first one is the belief in one’s immortality. Buying a life insurance policy feels to one as if they are planning for their own death.
This, though a common mindset, is foolish as life is uncertain and there will be no recourse for your loved ones once you are gone. In the long run, buying a life insurance policy early in life is a smart financial move. If you are young and healthy, coverage costs are much lower when you’re single. Life insurance policies usually cost more when you are older and the downside is that you will be uninsured in the interim.
A life insurance policy will ensure that money is available to your family immediately, in case something unfortunate were to happen to you and would help not only to pay off any debts you may leave behind but also take care of your family’s standard of living. Life insurance payouts resulting from death of the insured are barred from the beneficiary’s income and not subject to tax. Since the reasons we should have life insurance in our 20s are significantly unique as compared to when we are in our 50s, there is no denying that it is a great tool that can help you with your overall financial planning. If you are asking yourself, when is the right time to buy life insurance coverage for yourself or for your loved ones, it’s certain that the answer is now.