There are some things guaranteed in life and long tenure wealth and protection from eventualities are not one of them. Inflation and taxes are a certainty. At least, not till you do anything about this. Life insurance policies are one of some investment options which are capable of securing your wealth for over a long time period.Read more
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This means, that if you buy a life insurance policy in early ages, you can easily secure your savings from taxes and inflation for a long time period. So the main question Is it possible to buy life insurance plan during your college time? Do you need a life insurance plan as a college-going student?
Let’s discuss the answers to these questions in detail:
Opposing a popular acceptance that purchasing a life insurance policy as a student is literally not helpful, there is number of events in which a life insurance plan can definitely help you, even in your college years.
Student loans also called education loans in India. They are the loans that can be taken by a student, generally along with the co-applicant to fund your education. The rate of interest on student loans is lower than the personal loans.
What in case you pass away in between your higher education and still there is a major amount of loan that is left to be paid to the bank? Your dependents or the co-applicant will be left behind with all the financial stress. But if you have availed of a life insurance plan, the life cover amount can be utilized to pay off all the debts and loans you had.
Various individual decides to get married and side by side pursuing their education. Moreover, some people start their education late also. So, if you come under any of the above-mentioned classifications, then you must opt a life insurance plan.
The term plan will take care of your partner as the payout received can be utilized to pay off the funeral expenses and other 1-time prices. If you are having a kid, then you can use the amount to pay off his/her education also.
Parents do everything to ensure that you get to live a stress-free and comfortable life. With the growing age, it becomes your duty to take care of your parents. But what in case your death happens unexpectedly and you are not able to help them in the future.
A life insurance plan will offer them a life cover that they can utilize to take care of their family and it can also help in paying loans that your parents took from bank for your higher education.
As we have discussed the importance of buying life insurance early. Here is how you can buy a plan for yourself.
A college is a fun place, sometimes to spend earnings. Though, if you are also earning while learning, you can utilize these earnings in form of savings.
There are times when your parents and relative of yours gives you money as a token of love. If you got a considerable amount from your parents or close ones during your college time, you should try to use your money. You should find an investment option that keeps your money secure. Purchasing life insurance like a savings plan or term insurance plan will keep your money safe and also creates a habit of investing and saving from a very early age.
The Mid 20s is the age of enjoyment and planning financially for your future may not be the foremost thing that comes to your mind. Though, saving and investing at a young age will help you in the future. Following are the benefits of purchasing the best life insurance plan:
One of the main reasons to buy a policy at a young age is just because of premium amounts. The premium amount that you will pay at 25 years of age will be much lesser than the premium amount you will have to pay at 30 to 35 years of age. The insurance premium price increases with increase in age because younger individuals are less likely to die and diagnosed with an illness, and less risky to the insurer.
Life insurance plans are one of the safe investment options. They protect your investments and ensure that your loved ones receive the life cover if you die during the plan tenure.
The interest earned on the principal amount is reinvested in the plan to get more interest, called as compounding. Simply put, it is the interest that is gained on the interest.
The maximum time you remain invested in your plan; the further time you permit your money to increase exponentially.
Apart from providing coverage, life insurance is also used for long-tenure wealth creation. You can fulfill this by availing yourself of plans such as endowment, ULIP, money-back, etc. In these plans, you receive a maturity benefit after the expiration of plan tenure. ULIP has a component of investment in which you can select to invest in debt or equity as per the risk appetite. Money-back plans provide you regular payments every 5 years of the plan tenure and also have the maturity payouts. These plans enable you to accrue money and pay off the debts such as pending student loans.
In your starting working years, you can start claiming tax deductions on income to get tax savings benefits. The premium amount paid for a plan can be claimed u/s 80C of the ITA. This decreases your tax liability, helping you further save money.
The below table illustrates the life insurance plans offered by different life insurance companies for young individuals:
|Insurer||Plan Name||Entry Age||Maturity Age||Policy Term||Sum Assured|
|ICICI Prudential Life Insurance||iProtect Smart||18 to 65 years||75 years||5-40 years||Maximum: No Limit|
|Max Life Insurance||Online Term Plus||18 to 60 years||85 years||10-50 years||Minimum: 5 Lakhs Maximum: 100 Crores|
|Tata AIA Life Insurance||Sampoorna Raksha||18 to 60 years||100 years||30 -40 years||Minimum: 10X of AP Maximum: No Limit|
|Aegon Life Insurance||iTerm||18 to 65 years||100 years||5-67 years||Minimum: 25 Lakhs Maximum: No Limit|
|HDFC Life Insurance||Click 2 Protect||18 to 65 years||75 years||10-30 years||Minimum: 20 Lakhs Maximum: No Limit|
With the above-mentioned five reasons, now you will be able to understand if you should buy life insurance as a college-going student. Because of a young age, you are planning finances ahead of time for which you can receive benefits in the long run.
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