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LIFE INSURANCE

Singles: How to Build Corpus and Safely Secure Future With Life Insurance

Sumit Asrani Sumit Asrani 09 November 2017
4.8 (6 votes)

Did you know that life insurance plans help to build a corpus, secure your dependents – parents, family members, avail tax benefits and are the smartest way of investing your money as an individual or single person? Read on to know more.

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The other day, I met my friend while commuting in a Metro railway.

We met after a long time. Almost, after 5 years of our graduation. We had a great conversation during this short Metro railway trip from Versova to Sakinaka. And in between of our talks related to whereabouts and how life is, he mentioned something that made me think about things I never thought. And probably, you too, wouldn’t have thought about this.

So, in this post I will be sharing something that would make you think about life insurance plan seriously.

This is what he shared with me during our commute:

“One of our classmates, with whom he was in touch with, passed away recently in a car accident. He had gone abroad to pursue his post-graduation. He had taken a student loan from a bank where his parents were the co-borrowers. Apart from the emotional trauma of losing a young kid before their eyes, his parents had to also bear hole in their pockets. Because of the student loan, which they were equally responsible to pay back.”

I was shocked while listening to him. And the only question that was constantly bombarding in my head was:

“How on earth his parents will manage to repay the loan amount, when they themselves are not financially strong and that too, at such an old age, when it’s time to retire?”

Then a thought crossed my mind. This made me write this article to share it with all the individuals out there. Our short trip was heart moving, but quite a foresighted one.

So let me tell you:

The 7 Biggest Reasons Singles Must Buy Life Insurance Policy

1. You may have debt

When you have taken a student loan:

Interest rate in India on student loan is approximately 10.50% per annum, though it may vary from one financial institution to another. However, the point is, to know that the interest rate is quite high enough to repay without having a strong source of income or enormous disposal wealth.

Here’s something for you – to the rising star of tomorrow: if you are young, all fired-up heading for further studies to go abroad, it would be wise enough of you to take a life insurance policy.

God forbid, such unfortunate events shouldn’t happen to anyone. But the truth is, no one can escape. The best way is to prepare. And take care of all the contingencies, so that your loved ones do not have to undergo any financial hardships and the entire burden.

Remember: Debt doesn’t die with your passing away!

In such cases, if someone who is jointly opting loan for any purpose, it is better to have term life insurance plan, to avoid the unasked burden on your loved ones. And that way, your parents or and loved ones are not burdened with the re-payment of your student loan.

When you are in a partnership business: Usually, to start and run the business, people take loan. And if you are a business owner or have started your own start-up, running a small business with partners, business may doom with your passing away. To make sure, the business sustains and the business partners don’t suffer, you must make prior arrangements. As in any business, it’s a team work, and each one is depended on the other, even in the matters of finances.

A life insurance policy can allow your partners to keep things going seamlessly, at least financially.

Don’t leave your parents, loved ones, and business partners in grief and with the burden of loan payments.

Here’s what you can do as a young individual:

You know the loan amount that your bank finally agrees to sanction. The least you can do is buy a term life insurance policy with a sum assured of that amount. You may buy a term plan depending upon the duration of your student loan opted for.

So, protect your loved ones from the financial burden and hardships.

2. You have dependents whom you support financially

You have dependents:

  • If you are the only one who is taking take of your parents.
  • If you are a single parent juggling between different tasks to make ends meet and taking care of your child.
  • If you have younger siblings who are financially dependent on you.
  • If you have any other family members who are financially dependent on you for maintaining their lifestyle.

Imagine, how they would be affected if you were to pass away. Just imagine.

A life insurance policy would provide the needed funds to meet their needs, even in your absence.

You contribute to the household income:

Whether you are the sole bread earner or contributing a portion of the overall family’s income, if you are not around or were to pass away, your family would find themselves in a financial crunch.

Here's what you can do as a young individual:

You can avoid this from happening, by providing a financial shield with a term life insurance policy. Your family need not suffer any financial crisis. A term plan helps to you family with replacement of the loss of the income.

3. You are planning to get married and starting a family

Youth is the time when most of the people in India get married. Most of the Indians get married between the ages of 25 years to 30 years. And few do get married even before that.

With that comes more responsibility. You start planning your family as well as finances the moment you have an added responsibility on your shoulder. A sound financial knowledge and planning is a must.

With a partner and child who are dependent on you, you must take measures. As you know, raising a child is not a simple task. It also requires a good amount of money, whether it be their education, post-graduation, and marriage.

You would require funds at each milestone. A life insurance policy is good way to start with.

There are variety of life insurance plans you can look for to build corpus.

Different life insurance plans:

  • Term Plan – pure risk cover

  • Unit linked insurance plan (ULIP) – Insurance + Investment opportunity

  • Endowment Plan – Insurance + Savings

  • Child’s Plan – For fulfilling your child’s life goals like education, marriage, etc.

  • Money Back – Periodic returns of investment with insurance cover

And so on. You have numerous options to build corpus as per your needs.

I know, you definitely don’t want to see them suffering because of the financial hit.

Then, why delay?

With time, one gets busier and has more responsibilities. You may tend to slip this important step of building corpus and safely secure family’s future without any hassle.

It’s a good idea, when you are starting out.

Here’s what you can do as a young individual:

  • Assess your financial needs

  • Assess your financial goals

  • Consider inflation

  • Check different life insurance plans

  • Evaluate different life insurance policies with your needs

  • Consult with a trustworthy financial advisor

  • Opt for a suitable life insurance plan and stay covered

4. The younger you are, the lower is the premium

Yes, you read it right. It goes without saying that you are healthier when you are young than at old age. All life insurance companies take health and risk of death into consideration when calculating the premium. At younger age, you are healthy and fit. The risk of death is far lower than at the older age.

That said, it implies, life insurance plans are available at lower premium. What’s more? Once the premium is fixed, it is locked for throughout the policy tenure.

Take advantage, as life insurance companies are doing their best to reach out millennials:

  • Insurance is now available online – on the go.
  • Have user friendly websites.
  • Various websites have mobile apps too, especially, to support their customers with post-sales services.
  • It’s more convenient now, more than ever, you can simply, compare different insurance policies offered by various life insurance companies on any online brokers website, like Coverfox.com. And choose the best life insurance plan to safely secure your future of your family.
  • Marketing their policies in unexpected places like on the Flight Seat and Metro Railway.

Here’s what you can do as a young individual:

Let’s see how inexpensive it is at young age:

If you are a male, non-smoker, planning to buy a term life insurance plan with the base coverage amount of Rs.50 lakh, up to the age of 65 years, then, here's how the premium amount will vary with age:

Age at the time of purchasePolicy TermSum AssuredMonthly Premium (Range)
25 year40 yearsRs.50 lakhRs.350 – Rs.550
30 year35 yearsRs.50 lakhRs.400 – Rs.650

And if you are a non-smoking female, looking to secure family financially, here’s how premium varies age:

Age at the time of purchasePolicy TermSum AssuredMonthly Premium (Range)
25 year40 yearsRs.50 lakhRs.310 – Rs.450
30 year35 yearsRs.50 lakhRs.340 – Rs.550

5. Remember: Your employer’s life insurance may not be sufficient

Nowadays, most of the companies offer life insurance policy to their employees, however, one must keep in mind that this policy is in force as long as you are working in that organization. Once you leave your job, life insurance coverage doesn’t come with you. This means, you are no longer covered, and your loved ones may have to undergo financial hardships.

Related Article: Know If Life Insurance Through Your Employer is Sufficient?

6. Habit of Saving – A lost tradition in modern India

Believe it or not, but it’s true. Youngsters have moved away from the old-school tradition of saving. Saving is a lost art now, in India.

Saving is one way to build corpus for future and in case of emergency.

Is there any other option?

Another option is to buy a life insurance plan. Life insurance plans are looked as long-term investment options, apart from its basic feature to cover the life assured against the untimely death.

When you buy life insurance, and paying the premium will inculcate the habit of saving in you. Most of the policies pay you with good returns on investment. Premium paid every year flourishes and can be utilized when required. Each growing years comes with more responsibility, you can plan for each life’s milestone.

Once you are accustomed to save money to pay premium, you may start the habit of investing using other financial instruments. Here’s what you can do as a young individual:

  • Assess your financial needs
  • Assess your financial goals
  • Consider inflation
  • Evaluate different life insurance policies with your needs
  • Consult with a trustworthy financial advisor
  • Opt for a suitable life insurance plan and stay covered
  • Check different life insurance plans:
    • Term Plan – pure risk cover
    • Unit linked insurance plan (ULIP) – Insurance + Investment opportunity
    • Endowment Plan – Insurance + Savings
    • Child’s Plan – For fulfilling your child’s life goals
    • Money Back – Periodic return of investment + Insurance

What’s more?

There’s still something more, to make sure you do consider life insurance plan.

7. Tax Benefits with Life Insurance plans

Another best part on buying life insurance is, all the premiums paid towards the plan to keep it in force are eligible for tax deduction under Section 80 (C) and the payouts are also tax exempted under Section 10(10D).

The above seven reasons are good enough to consider life insurance policy, even if you’re not married or are a single parent.

Note: Even if you are young, healthy, and cost-savy, before you buy life insurance, make sure you are self-dependent and not dependent on parents to pay off the premiums. Also, ensure you have enough savings, in case any emergency arises where you may require some liquid funds in your hand.

Bonus: Tight on Budget? Don’t worry.

Here’s what you should do:

Buy young, buy cheap, buy pure risk cover: Buy term insurance plan.

You can use our term insurance premium calculatorto find out premium.

Moreover, this is how Coverfox is helping their readers, Coverfox offers NOMINEE ASSISTANCE PROGRAM:

To help the family of the life assured at the time of claim.

  • Claim Assistance
  • Legal Counselling
  • Financial Counselling
  • Psychological Counselling

Read more about Nominee Assistance Program by Coverfox for Term Insurance Customers

For singles who wish to build corpus and financial planning:

If you are an individual, thinking to safely secure family financially, while you stay covered, then you must not overlook benefits that life insurance plans offer at a reasonable cost.

My classmate didn’t have life insurance plan; his parents are going through a rough phase in their old age. It’s worse than a nightmare when they do not have enough source of income to support their own monthly expenses.

So, protect your family, TODAY!. Don’t delay.

As an individual, you must have life insurance policy to provide financial protective shield to your loved ones.

Be free to ask any queries. Looking forward to listening your queries and help you to resolve.

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4.8 (6 votes)
Sumit Asrani
Written by Sumit Asrani
He's a writer. His blood cells are woven with Hypergraphia, as he breathes in books, he exhales words and sneezes poetry. Captivated by the web-of-words he's trying to escape miraculously as a content writer at Coverfox.com.