Linked & Non-Linked Insurance Plans: What You Should Know

1. Linked & Non-Linked Insurance Plans: What You Should Know Highlights: Term insurance is a type of life insurance that covers a specific duration (as per your choice) for which premiums are paid. It can also be of different types and have added benefits. It is best to buy term insurance when you’re at an earning age only because there would be an absence of regular income post your retirement and that would make paying premiums a liability; Also, you should provide a financial cover to your family from an early age. Not only this but it is also cost-effective i.e., premiums are lower when you buy term insurance at an early age and you get tax benefits and added benefits on the term insurance policy very easily. There are several factors you need to consider while you’re buying term insurance. Your decision over term insurance should not just depend upon the factors like age, financial status, or risks covered, but you should also consider buying it only when you have a stable and continuous income. Why is that important? Let us understand here. What is Term Insurance? To answer the question above, let us first understand what term insurance actually is. Term insurance is a type of life insurance that provides coverage for a specific policy term defined by the buyer, for which premiums are paid. In case of the unfortunate

2. demise of the insured person during the policy term, a Death Benefit and any other benefits (if applicable under the policy) are paid to the nominee. And if they survive the policy term, there are no benefits or return of the premiums paid, and the policy ends. Why Should I Buy Term Insurance in My Earning Age Only? For the simple reason of not having a regular income after you retire. This and a lot of other such reasons contribute to why it is only advised to buy term insurance in your earning age like: – There should be Cash Inflow and NOT Outflow in your 2nd innings Once you retire, you no longer have a recurring monthly paycheck. In absence of that, any financial liabilities during that phase that requires regular payments may become difficult. Therefore, to avoid that, you shouldn’t be getting term insurance after your earning age. In fact, you could plan your retirement corpus instead of getting yourself into a liability. Financial security: When you’re in your 20s, 30s, or 40s, you are one of the important earning members in your family. You may or may not be the sole breadwinner, but your income definitely keeps the wheel running in your family’s lives. This is why it is important to do financial planning for them while young, so that in your absence, their daily lives are not hindered. Cost-effective: Term insurance policies are usually one of the easiest life insurance policies. They are easy to apply, affordable, and provide high life covers. This makes it one of the best life insurance policies to get to secure your family’s future in your absence. Getting a term insurance policy early in your career also ensures lower premiums and an overall lesser amount of money being given in premiums over the years. Tax Benefits:

3. There are tons of ways to save your taxes in the financial world. And buying term insurance is one of them. When you’re an important earning member in the family, your financial planning must include plans for saving taxes as a large chunk of your income may go into paying them. Getting a term plan is a great way to do so. Under Section 80C of the Income Tax Act, you can avail up to 1.5 lakh tax deduction on term policies. Parallelly, the death benefit paid to the family or beneficiary is also exempted under Section 10 (10D). Added benefits: When you get insurance to secure your family’s future, it is best to get the added benefits and covers for full security. In most cases, insurance policies and add-ons are given after thorough research on the individual’s age, health condition, etc. This means, that if you’re over a certain age limit, you might not be eligible to buy an additional benefit on the basic term policy. This gives you another reason to buy term insurance at an early age. For example, with Aegon Life iTerm® Insurance, you can get an critical illness rider.