When Should You Not Get Term Insurance Policy?

Get Term Insurance Policy

When it comes to life insurance, pure protection get term insurance policy are the best choice. They provide appropriate security at a very minimal cost. Consider this: a term plan covering a 30-year-old nonsmoking lady until the age of 60 will cost her about $1,000 per month. This is less expensive than a supper excursion for two. When purchased even earlier, at the age of 26, the premium is reduced by 20%. However, reduced rates should not be used as an excuse to get insurance early. When you need insurance and how much you need depends on your current financial status, and there may be times when you don’t need any at all. Mint provides three reasons why you should not get term insurance.

No dependents or liabilities: The purpose of life insurance is to provide financial security to your dependents in the event of your death.

If you don’t have any dependents, you have no one to defend you in the case of an emergency. This might apply to young workers who are not married and have financially secure parents. “Any insurance choice should be based on the severity of the financial burden and the family’s ability to bear this load,” said Mahavir Chopra, co-founder and CEO of Beshak.

The goal is also to avoid passing on your responsibilities to your heirs in the event of your death. Even if you have no dependents but are servicing a debt, it is suggested that you get term insurance policy in the amount of the loan.

READ ALSO : Term Insurance Premiums are Likely to Increase. Are You Covered Yet?

Have big assets: If you have considerable assets and little or no obligations, you may avoid purchasing life insurance. However, keep in mind that this computation must be done properly. After subtracting all debts, assets and accumulated wealth should be adequate to replace the only breadwinner’s salary. Furthermore, if you have long-term financial objectives, such as paying for your children’s education or your spouse’s retirement, those assets should be able to cover them.

To save tax, the premium paid for get term insurance policy may be deducted from the 1.5 lakh tax break given under section 80C, as long as the yearly payment does not exceed 10% of the amount guaranteed. Many taxpayers hurry to get life insurance in order to take advantage of tax savings at the end of the fiscal year, even if their financial condition does not need it. Even if your family does not need insurance, you may take advantage of the 80C deduction by investing in PPF, ELSS, or taking out a home loan.