What is the Right Time to Invest in Life Insurance?

Written by : Knowledge Centre Team

2020-05-13

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Urban Indians are more likely to purchase life insurance after the birth of a child in the family. 52% of families with kids have a greater awareness of the importance of buying life insurance as compared to 29% of those without kids.

Conventional wisdom favours the purchase of life insurance during the later stages of one’s life. However, in order to safeguard the key milestones in their life and that of their loved ones, people of every age bracket should come to the realization that integrating a life insurance policy is a must in their financial portfolio.

One of the most commonly asked questions when it comes to life insurance investments would be, is there a right time to invest in a life insurance policy? The answer to that question would be: the earlier the better. However, if you haven’t invested in a life insurance policy yet, it’s never too late either!

Let us take a look at how a life insurance policy can provide financial protection to you at various stages in your life.

18-25 Years

You have just stepped into adulthood, are pursuing higher education or have just landed your first job. You are in the prime of your health with no dependants and little to no responsibilities. While buying life insurance might not figure on your priority list, you can get a policy with a higher sum assured at the lowest premium at this stage precisely because of the reasons listed above. Absence of any liability and disease makes you a low-risk investment to the insurer who would easily offer you a lower premium as compared to someone 10 or 20 years older. Besides, you would need to buy an insurance policy later in life, so it only makes sense to invest in one early on, to stay protected longer and that too at affordable rates.

At this stage of life, investing in a simple term plan, which provides the benefits of increasing coverage can prove beneficial. In such a term plan, as your liabilities grow over the years, so does the amount of coverage offered. This thereby ensures that you are adequately prepared for what lies ahead.

25-35 Years

People in this age group would have either recently got married, be planning to get married or be already settled into their matrimonial life. They take on more responsibilities as the breadwinner of the family as well as at work. They also look towards fulfilling their financial goals and milestones. For instance, one might have taken a loan to buy a car, or would be paying off a mortgage for their dream home. Since your financial liabilities are increasing by the number, this is an opportune moment to invest in a life insurance policy to safeguard your family members from the burden of repaying your debt, in the event of your unfortunate demise. Over and above that, the need to grow your wealth and prepare for the responsibilities that lie ahead is also looming large. At this point in time, a unit-linked life insurance plan (ULIP) can come in handy and help you grow your wealth while protecting the needs of your loved ones. Since you are younger, you can afford to take risks and be an aggressive investor; you can invest in equity funds through your ULIP that help you grow your wealth substantially.

To invest in a ULIP, you can opt for the Invest 4G ULIP from Canara HSBC. The plan comes with different portfolio strategies, fund choices as well as an option to switch and redirect funds as per your choice.

35- 45 Years

In your late 30s, your family is growing in size as you bring children into this world and become proud parents. Not only does the number of dependents increase, but so does your sense of responsibility. You are managing the household budget as you give your children the best education money can buy and also take care of your aged parents and their medical needs. The need to create a nest egg for the future of your loved ones is more pronounced than ever. And so is the urge to protect them from any uncertainty that arises in your absence, leaving them financially vulnerable. This is especially true if you are the sole earning member of the family.

Even if it is late in life, one must realize that buying life insurance is vital to giving your loved ones a secure future. At this point, your best bet would be an endowment plan. An endowment plan also allows you to grow your wealth, while protecting the financial security of your family. Since an endowment plan is more risk-averse than ULIPs, it helps you accumulate a risk-free corpus.

Above 45 Years

Having spent a considerable period of your life working, you might be looking forward eagerly towards a retired life. The steady income that you received during your active working life, would also cease once you retire. In order to prepare for retired life, as well as guarantee that your spouse is well looked after in the event of your absence, a suitable life insurance plan is necessary even in your later years. In this case, an annuity plan, that helps you build a corpus specifically for retirement, while also providing life cover, can be the perfect solution.

Conclusion: To sum up, there exist various life insurance plans in the market that take into account your age and align with your goals accordingly. So, put simply, the right time to invest in life insurance is now.

Each life stage comes with its own set of responsibilities and life insurance helps you be prepared for any eventuality, thereby ensuring a financially secure future for your family. So become a policyholder now to stay protected for long!

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