We all believe that life or term life insurance is only necessary for those with dependents or family. But the truth is that a single individual can extract similar benefits from having life insurance coverage, just like any other person.
You know that the term plan provides coverage for about 1 to 30 years. And because it offers death benefits to beneficiaries in case of untimely death, it is immensely valued by people who have dependent family members. Irrespective of this fact, there are various reasons why a single individual should consider buying a term plan.
Should a Single Person Buy Term Insurance?
As financial awareness spreads across society, everyone is making financial decisions to safeguard their future and their families. Many people are leaning towards buying term insurance plans. In such a scenario, you also want to buy a 1 crore term insurance plan. But since you are not married or have a dependent family, you are a bit sceptical about going forward with your purchase plan.
To help you decide better, here are some reasons why a single person should buy term insurance.
- Term life insurance provides health insurance coverage
Diseases do not discriminate against younger individuals nor do they see your marital status. Moreover, if you are a part of the corporate race with disproportionate working hours, and poor eating and drinking habits, you are more susceptible to health problems. In such a scenario, having individual term life insurance that also offers health coverage can be helpful. Popular plans like Tata AIA term insurance offer the dual benefit of term insurance and health insurance.
- Term insurance offers tax benefits
If you are a working professional who pays income tax, purchasing a term plan is going to be a very sensible decision for you. Paying the premium for a term insurance is tax deductible under Section 80C of Income Tax Act 1961. And since term insurance also offers health care benefits, you can claim further deductions under Section 80D of the same act.
So, if you want to save on income tax, go for a term insurance plan.
- If you are single for now, the premium is less
If you are a young individual who intends to marry and raise a family in the future, you should consider buying an individual term insurance plan now. Since you are young, the insurer will charge you less premium, for you will have comparatively less health complications. But if you take a term plan in the later stages of life, the premium may sharply increase.
Another good point is that the insurance premium for term plans remains the same for the entire policy period. So, after getting married, you can also update your insurance portfolio and designate your spouse as the nominee in their term insurance plan. At this point, you can also re-evaluate your insurance coverage to ensure it aligns with your current needs.
- Helps with loan obligations
In case you or your parents have taken an education loan to pay for your studies, it becomes an individual obligation to repay that loan once you begin your career. But since we don’t have any control over unfortunate events, a sudden demise can shift the loan burden back to your parents. But if you have individual term life insurance policy, the money from the death benefit can be used to repay loans and debts.
The advantages of having a term insurance plan are numerous, that includes providing health insurance coverage, cost-effectiveness, and helping with loan obligations. All individuals — married or single — are eligible for these benefits. So, it is advisable to purchase a term insurance plan while you are young and healthy to lock in a fixed premium for the policy term.