Looking For Ways to Maintain Your Financial Health? Here’s What to Do
Living a healthy and happy life with the family is always a dream, and we often do everything we can to make this happen. However, uncertain times are never going to be easy to plan for, but it is important that you consider them and think of a safety net for your family. It is always helpful when breadwinners of the family think ahead of time and buy term insurance to financially protect their family, even in their absence.
How Can Age And Income Affect Your Term Insurance Decision-Making?
Your age has a big role to play in deciding the premium of your term insurance plan. It is easier for you to get a lower premium on your policy at a young age because you would relatively be fitter and have a smaller medical history.
If you have not opted for a life insurance policy before then, this would be as good a time as any. Buying an insurance policy too early, and your job may not be able to sustain the premiums if it is very new at that point. If you wait for your job to get stable, then there is a chance that you are not that healthy and fit now and may have some medical history already.
At the end of the day, you need to strike a balance between your age and income to decide when to buy the best term plan for yourself and your family’s financial security.
How To Plan Your Finances Right With Term Insurance?
- Plan Your Finances
Before you jump into any kind of investment or saving plans, know how much you are worth in present times and how much do you and your family have stashed in for rainy days. Next, you must know how many immediate expenses you need to look after and what long-term expenditure you can already foresee.
It is important that you have a pretty good idea about your current and future expenses and how much of a nest egg your family already must fall back on. Knowing this will help you plan your investments and ensure that you save enough for emergencies and to take care of your family too.
- Create Goals
Be it saving for a wedding or to buy a car, surprise your spouse with an international trip or save for your children’s education, your life goals can be many. What is important here is to jot down these goals, classify them as short-term or long-term, and then start saving towards them accordingly.
Even in your absence, your spouse won’t feel the pressure of bringing up the kids alone because your term insurance plan will cover them.
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- Consider Buying A Term Plan
Wondering what is term plan and how it benefits you? A term insurance plan, in simple terms, will offer you a life cover that will financially secure your family in your absence. You can also claim tax benefits on the same for the years you continue to pay your premium. If you are the sole earning member of your family, then it would be wise to plan their future by leaving them a lump sum to take care of their needs.
- Choose Add-On Riders
Many times, people forget that their term insurance plans also offer riders that can help you customise the policy to suit your needs and those of your family. You can avail most of these riders at a very nominal rate.
Some of the riders that most insurers offer in a term plan are waiver of premium, accidental death, critical illness cover, complete or partial disability cover, etc. Know which ones will add value to your term plan and add them accordingly.
The Bottom Line: Maintaining Financial Health Made Easy!
Financial health is a mix of all your savings, investment, and your policy, which together can determine just how secure you are in times of need or emergency. However, people often step back when it comes to buying insurance as they do not earn returns on it.
While you do not earn a return on investment with term insurance policies, some of the present-day benefits you can enjoy from your life cover are the tax benefits. According to the Income Tax Act of 1961, you can avail of a tax deduction of up to Rs. 1,50,000 on your premiums as per the old tax regime every year, under section 80C.
The key to maintaining your financial health is planning, analysing and ensuring that you follow your financial planning religiously. Take that first step towards saving for your future goals while providing for your family in your absence.