Insurance

2.  Insurance is a way to manage your risk. When you buy insurance,
you purchase protection against unexpected financial losses. The
insurance company pays you or someone you choose if something
bad happens to you. If you have no insurance and an accident
happens, you may be responsible for all related costs.
 Description: Insurance policies, a contract between the policyholder
and the insurance company, are of different types depending on the
risk they mitigate. Broad categories include life, health, motor,
travel, home, rural, commercial and business insurance.

3.  The purpose of buying a term insurance plan is to provide financial
support to the family of the person insured, once they are not in this
world anymore. The main aim of term insurance is financial
protection. A term insurance covers your future expenses and
liabilities if you are not there tomorrow.
 The probability of a younger person having large savings to tide over
any sudden financial emergency caused by their death, disability, or
illness, is very low. Therefore, insurance provides the best solution to
protect their family’s financial stability.

4.  It is cost effective if bought at a young age and for a longer period of
cover. When you are young, you are also very healthy. If your cover
expires at 55, it is expensive to buy it again especially you are
dealing with health issues. The other need at higher age is
protection against health-related expenses and cover for critical
illnesses which have the tendency to exhaust the lifetime savings of
the individuals. Term insurance policy is also bought to cover your
existing and future liabilities that reduce with age, so it makes
sense to buy a term insurance when you are younger.

5.  A policy also is cheaper when you are younger. When you buy life
insurance, the company calculates the risk involved to it depending
on your medical condition and age. The younger you are the better
your health, which means the risk to the insurance company is less.
Which in turn brings down your premium amount making the policy
cost effective for you.

6.  Also, though you maybe young, chronic conditions like diabetes and
hypertension start showing up early for some people. You don’t want
to be caught off guard at the time of need and rather be well
prepared. It makes sense for you to buy a term plan early so that
you can avoid all this. Also, when you buy a life insurance policy
before these health conditions develop in case they do, you will pay
substantially lesser in premiums because the company considers the
health condition of the person before deciding the premium amount.

7.  At 25, a plan with Rs 5 lakh coverage would cost you around Rs
5000, at 35 you’ll have to shell out around Rs 6000 and at 45 the cost
rises to Rs 8000. So buy it as early as possible to book the policy at
the lowest possible premium.
 It is always best to start early and buy a term policy to make it cost
effective for you.