When most of us consider purchasing insurance, health insurance is what immediately comes to mind. We hear that the cost of medical services, constant hospital bills, operations, and doctor visits is expensive. But take a moment to think: term life insurance should be your initial insurance policy, not health.
Sounds odd? Let's see why this is a good idea, particularly if you're the type of person who wants to shield your loved ones, save wisely for the future, and create a financial safety net early in life.
What Is Term Life Insurance?
Before we proceed any further, let's know what term life insurance is. It's a form of life insurance that gives protection for a limited time, or "term" such as 10, 20, or 30 years. In case something untoward happens to you within this term, your family gets a predetermined sum of money, referred to as a death benefit.
Unlike any other form of life insurance, term plans are basic and inexpensive. You pay a modest premium each year, and your loved ones receive financial assistance if you're not there to look after them. It's not an investment; it's just protection.
Why Term Life Insurance Should Come First
You might be thinking, "Shouldn't I first purchase health insurance to pay for hospital bills?" That's a good question. Let's however, turn the tables and think more critically. Here's why term life insurance should actually be the first thing you should do:
- Your Family Relies on You, Even If You're Young
If your parents, siblings or even your future spouse and children depend on your income, just think how they would manage financially if something happened to you. Health insurance covers you when you are alive. Term life insurance covers them when you are not.
Nobody wants to think about these things, particularly when young and in good health. And that's precisely the reason it is the perfect time to purchase term life insurance it is much more affordable and less complex to obtain when you are young. An extra monthly expense today may result in your family receiving lakhs or even crores of rupees in the future if anything untoward occurs.
- Term Life Insurance Is Extremely Low Cost
Suppose you're a 25-year-old non-smoker. You can purchase ₹1 crore term life insurance cover for as low as ₹500–₹700 a month. That's less than the cost of a weekend getaway!
Put that alongside health insurance premiums, which are going up each year. And the more add-ons you need, like maternity cover, dental care, or critical illness, the pricier it becomes. Term life insurance provides enormous value at a very small price.
- Peace of Mind That No Health Plan Can Offer
Health insurance may cover a ₹50, 000 medical bill. But term life insurance can pay for the entire future education, housing loan, wedding costs, and living expenses of your family.
What is more empowering than knowing that regardless of what occurs, your family's financial future is secured?
- The Younger You Are, The Smarter The Move
Most people wait until their 30s or 40s to think about life insurance. But here’s the thing: life insurance premiums increase with age. Plus, if you develop a medical condition later, it might become harder to get insured or even get accepted at all.
Starting young locks in a lower premium for decades. That’s one of the smartest long-term financial decisions you can make.
- It Supports Financial Planning Goals
Most individuals nowadays are searching for the best investment scheme to ensure their future. Term life insurance is not an investment in itself, but it is an important part of financial planning.
Here's how: it gives you the confidence to take bolder steps towards building wealth. When your family's security is assured with term insurance, you can invest without restriction in mutual funds, begin a business, or pursue higher studies without always fretting over "what if something happens to me?" It frees up your mind and wallet space for wiser choices.
Busting Some Popular Myths
"I'm young and healthy. I don't need life insurance yet."
That's precisely why you need to buy it now that you are young and in good health. Premiums are affordable, approvals are straightforward, and risks are low. Postponement only makes it more expensive.
"Health insurance is more important."
It is important, sure. But if the objective is to create a solid safety net for your family, life insurance takes precedence. Health insurance provides protection against short-term problems. Term life insurance provides protection against life-altering, long-term repercussions.
"I don't have dependents currently."
You might not have anyone relying on you today. But what about 5 years later? Term insurance is a long-term strategy. You're planning today for the family you might have tomorrow.
How to Select the Best Term Life Insurance Plan
Not all term plans are the same. Here's a quick checklist to get you started:
- Select the Correct Cover Amount: Consider your future obligations. A thumb rule is 10–15 times your income per year.
- Select a Long Term: Opt for a term that insures you till at least age 60–65.
- Check Claim Settlement Ratio: Opt for insurers with a high claim settlement ratio (above 95%).
- Add Riders If Required: Riders such as accidental death cover or critical illness can provide additional cover.
- Keep It Simple: Don't be swayed by frilly features. A simple term life plan is usually the best option.
A Real-Life Analogy
Imagine your financial journey as constructing a house. Health insurance is similar to fitting good plumbing and electrics it makes life easier. But term life insurance is the foundation. Without it, everything else can come crashing down if the worst occurs.
Would you construct a house without a solid foundation? No? Then don't construct your financial future without term insurance as well.
Conclusion:
Purchasing term life insurance first isn't about ignoring health; it's about being smart with priorities. Health insurance assists you, while term life insurance assists those most important to you.
In the dash to locate the best investment plan, don't forget the greatest investment you can make is peace of mind for your loved ones. Term life insurance provides that. So if you're launching your career, contemplating marriage, or mapping your future, begin with protection. Begin with purpose. Begin with term life insurance.