Skip to main content

Getting Insured at young age Saves a lot of money



How many of you have received a call from an insurance company or an agent trying to sell you a policy? I am sure that every professional in their 20s or early 30s would have received such a call. But have you ever stopped and thought whether you have adequate insurance cover, especially if you are a young working professional with financial liabilities? In most cases, I would assume the answer is a big 'No'. Insurance in the early years of professional life may sound a waste of money when other lifestyle and personal expenses take priority.

Young professionals today, anywhere in their 20s or early 30s, are financially independent. Many manage their own finances and investments like paying off education loans, buying own cars and investing in property – mostly first homes. The last decade has also seen a major shift in the lifestyle of young professionals with more working hours, higher stress levels and an alarming rise of related lifestyle diseases like diabetes, obesity and cholesterol. In such a scenario, insuring oneself becomes as essential as other expenses.


Additionally, many of these young people provide financial support to their families, either partially or totally. In such a scenario, life insurance as well as health insurance is absolutely critical so that in case of any unfortunate event like an accident or a sudden demise, the family doesn't go through a financial trauma as well. Even if one is not contributing towards family income, a health cover or a rider is a must so that in time of need, the cost of treatment is covered and the family doesn't face a financial setback.


There are various insurance options young professionals can choose from, depending on their needs. From retirement, health to pure protection — there is an insurance cover for all of these. It is advisable to invest earlier than later in insurance products – for example, if you are investing for retirement, the earlier you begin investing, larger the corpus would be on maturity. Term insurance is pure insurance and is very cost-effective. A term plan, coupled with an additional health rider, can give you a 360-degree protection in any exigency. Many insurance companies have also launched online term insurance products that are cheaper and easier to buy. You can log on to any comparator site like policybazaar.com or apnainsurance.com and compare the rates of term plans offered by all the insurance companies.


Another reason why some of you do not buy insurance earlier in life is because your company (in most cases) covers you under a group life and health plan. The key thing to remember is that the group cover may not be sufficient in your case or aligned to your income. Secondly, when one is young and healthy, you are a better risk; hence, insurance companies can offer you a life cover at lower rates. If you apply for a personal life insurance later in life, your application may be rejected or you may end up paying higher premiums depending on your medical history.


Investing early in insurance will also help you save tax and instil in you the habit of saving and financial discipline that ensures peace of mind in the long run. So, if you are a young professional and have not insured yourself yet, the next time you come across any material on insurance or a call from an insurance company, hopefully you will give it a serious thought.

 

Popular posts from this blog

Birla SunLife Manufacturing Equity Fund

The Make in India program was launched by Prime Minister Naredra Modi in September 2014 as part of a wider set of nation-building initiatives. It was devised to transform India into a global design and manufacturing hub. The primary motive of the campaign is to encourage multinational as well domestic companies to manufacture their products in India. This would create more job opportunities, bring high-quality standards and attract capital along with technological investment to bring more foreign direct investment (FDI) in the country.   Why India as the next manufacturing destination?   The rising demand in India along with the multinational's desire to diversify their production to include low-cost plants in countries other than China, can help India's manufacturing sector to grow and create millions of jobs. In the words of our Honourable Prime Minister- Mr. Narendra Modi, India offers the 3 'Ds' for business to thrive— democracy,...

Kisan Vikas Patra - KVP

  Kisan Vikas Patra (KVP) First launched in 1988, the Kisan Vikas Patra (KVP) is one of the premier and popular saving scheme offering from the Indian Postal Department. This product has had a very chequered history- initially successful, deemed a product that could be misused and thus terminated in 2011, followed by a triumphant return to prominence and popular consumption in 2014. The salient features of KVP are as follows- The grand USP- Money invested by the applicant doubles in 100 months (8 years, 4 months). KVPs are available in the following denominations- Rs.1000, Rs.5000, Rs.10,000 and Rs.50,000. The minimum purchase value for the KVP is Rs.1000. There is no maximum limit. KVPs are available at all departmental post offices across India. These certificates can be prematurely encashed after 2 ½ years from the point of issue. KVPs can be transferred from one individual to another and from one post office to another. ----------------------------------------------------- Inve...

Mutual Fund Review: Reliance Regular Savings Equity

    Despite high churn, Reliance Regular Savings Equity has managed to fetch good returns   In its short history, this one has made its mark. Though its annual and trailing returns are amazing, the fund started off on a lousy note (last two quarters of 2005). It managed to impress in 2006 and was turning out to be pretty average in 2007, till Omprakash Kuckian took over in November 2007 and wasted no time in changing the complexion of the portfolio. Exposure to Construction shot up to 28 per cent with almost 21 per cent cornered by Pratibha Industries and Madhucon Projects . Exposure to Engineering was yanked up (18.50%) while Financial Services lost its prime slot (dropped to 6.69%) and Auto was dumped. That quarter (December 2007), he delivered 54.66 per cent (category average: 25.70%).   When the market collapsed in 2008, thankfully the fund did not plummet abysmally. But even its high cash allocations could not cushion the fall which hovered around the category average. ...

Total Returns Index brings out real Equity Funds Performers

From February, equity mutual funds have to change their benchmarks to account for dividend payments. Until now, funds used price-based benchmarks alone. TRI or total return indices assume that dividend payouts are reinvested back into the index. What this does is lift the overall index returns, because dividends get compounded. For example, the Sensex TRI index will consider dividend payouts of its constituent companies while the Nifty50 TRI index will consider dividends of its constituents. Using TRI indices as benchmarks comes on the argument that an equity funds earn dividends on the stocks in its portfolio, which they use to buy more stocks. Therefore, using an index that also considers dividend reinvestment would be a more appropriate benchmark. Shrinking outperformance With a stiffer benchmark, it is obvious that the margin by which an equity fund outperforms the benchmark would shrink. Rolling one-year returns from 2013 onwards, the average margin by which largecap funds out...

How to generate a UAN Online

Best SIP Funds Online   In order to make Employees' Provident Fund (EPF) accounts portable, the Employees' Provident Fund Organisation (EPFO) had launched the facility of Universal Account Number (UAN ) in 2014. Having a UAN is now mandatory if you have an EPF account and are contributing to it. So far, you got this number from your employer and every time you changed jobs, you had to furnish this number to the new employer.  However, in order to make it easier for you to get a UAN , and without your employer's intervention, the EPFO now allows you to go online and generate a UAN on your own. This facility can be used by freshers, or new employees, who are joining the workforce as well as by employees who have older EPF accounts but do not have a UAN as yet. As a new employee, you can simply generate a UAN and provide the number to your employer at the time of joining, when you need to fill up forms for your EPF contribution. As per a circula...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now