You need to be completely aware of your financial status and needs and then research thoroughly into a different kind of term insurance plans.
Term insurance plans are requisites for a responsible adult. My brother has recently turned 30 and still does not hold an insurance cover. For his benefit, and the benefit of many others in the same situation – let us understand what the best choices are.
Term insurance gives you the option of a decently high cover, that too at a lower cost. This sort of a plan is perfect for the younger population as it is easy for them to afford it. Yes, there are multiple kinds of term plans, and it does take some research to pick the one that suits you best.
Let us look at the different types of term plans:
- Regular – this is as forthright as it gets. In a regular plan, you are to pay a particular premium amount. Your nominated party will receive the sum assured if you are to die in the tenure. If you were to live beyond the tenure, the money stays with the insurer. This works well for a 30-year-old. By paying a premium of something to the tune of Rs 500 – Rs 1000 monthly, you can get a wide coverage of around Rs 1 crore. A regular term plan makes for a good option for the young.
- Convertible – this plan suits 30 years old very well. Your salary might not be at its peak at this age, but you are bound to earn many times over than in the years to come. Hence a convertible plan works well with this as it begins as a regular plan. Over time you can choose to change it into an insurance plus investment plan. The policyholder pays low premium amounts, leading up to a death benefit. Once your income is more significant than now, go ahead and change the plan into an endowment plan. You will also be required to widen the coverage amount along with the premium returns.
- Increasing – in this sort of a plan, the coverage increases annually. This increase is active till the fund-size becomes twice its original size. Along with fund-size increase, there will also be an increase in the premium amount. This is an ideal plan for a 30-year-old. You may begin with limited responsibilities in your youth, but the responsibilities grow over the tears. Marriage, house, car, children, their education and health etc. require more money. An increasing plan ensures your growing responsibilities are taken care of.
- Decreasing – this is the polar opposite of the abovementioned plan. This works best when you have an active home or education loan. You ought to link your term plan with your outstanding loans. In this scenario, if you were to die, your family would not be the ones paying off your debts. However, this is usually taken by older people with decreasing liabilities.
- Return on premium – the basic premise of this plan is that your premiums will be returned if you outlive the plan tenure. This is different from term plans as you receive benefits on surviving the policy tenure, unlike term plans. Premium amount on this plan is higher than regular term plans. This works best for a 30-year-old who is earning a high salary and is financially sound enough to afford the premium amount.
Start Early
Nothing is better from an insurance and investment standpoint to begin an insurance plan early in your life. The plan is much cheaper for younger folk. Additionally, your responsibilities are limited in your youth, making it easy to invest in insurance. More importantly, you safeguard your dependents’, and family’s future is something were to happen to you.
Bottom Line:
You need to be completely aware of your financial status and needs. Once you have the knowledge of this, research well into a different kind of term insurance plans. 30 is a perfect age to get enrolled in an ideal life insurance plan – make the best of it. Come to a decision early to get the best deals and to live a stress-free life.