We all know it is
essential to buy Term plan. But it is not just a matter of buying –
it is also that of deciding what the best time is to buy one
considering the costs and benefits involved. Is it too early or too
late to buy? Would I be saving more or less if I decide to postpone
Here is a briefing
on timing to buy term insurance, in consideration of factors such as
cost, inflation, risk, and of course, tax benefit.
cost more with time? There
can be no standard way of telling how much your Premium would be
when you decide to purchase. However, you could be sure of the fact
that the later you buy, the more costly it would be. And the reasons
have definitely to do with Inflation and risks.
What role does
In simple terms, you could expect the rupee to lose its value with
time, irrespective of how much it pares against the dollar. An ounce
of product A would cost more ten years down the line in all
likelihood, than what it costs now. Of course, you could expect your
salary to rise as well – unfortunately, while there is no sure way
of knowing what your salary would be in the future, you could vouch
for the fact that costs would have rocketed up. If you could find a
way for your salary to match the rising costs, count yourself lucky.
What are the
If you buy Term Insurance early in your career, you would be in the
low-risk bracket, and would hence have lesser premium to pay. To the
contrary, if you were to find yourself in the high-risk group
because of time and age, and if you decided one fine day to buy
insurance, you could be sure that the insurance companies would
welcome you, but only with a higher price tag.
So, what about
Your savings on your term plan would come from lower costs
associated with premiums, as well as lower taxes that you pay on
account of provisions associated with income tax. Considering that
money is only likely to lose its value with time, money saved today
means much more than money that you would save later. And you may as
well want to make use of legal provisions today, than speculate on
what they could be years later when you make a buying decision.
So, if you are
looking for tax benefits through term insurance, now is the time.