Life Insurance in College: As a young college student, buying a life insurance policy will be the last thing on your mind in the middle of your study schedule. Getting an insurance plan is considered something most adults do but today times have changed.
Holding a policy is not only about life insurance, it is also known to create wealth with options like a unit-linked insurance plan (ULIP) and a cashback policy. Here are five reasons why you should buy an insurance policy when you are in college.
Benefits Of Life Insurance in College
5 Benefits Of Life Insurance in College
Here Are The 5 Benefits Of Life Insurance in College:
Life Insurance in College: When you are young, the premium rate you have to pay to get a life insurance policy is very low. When you compare this to the premium you pay in your late 20s or 30s, the cost increases exponentially.
As a college student, if you buy a term plan, you will have less money to invest and in return, you will get a life cover that will support your family in the future.
Fulfills wealth-creating goals
Life Insurance in College: An insurance policy is not only a tool for gaining coverage but can also be used to create long-term wealth. You can achieve this by going for schemes like Refund Policy, ULIP, and Endowment Scheme.
In plans like this, you will receive the maturity amount after the end of the policy term. ULIP has an investment component where you can invest in equity or debt according to your risk preference.
The cashback plan offers regular payouts every five years of the policy term and includes maturity benefits. Such plans help you accumulate money and you can also repay loans such as outstanding student loans.
Provides Life Cover
Life Insurance in College: When you buy a life insurance policy, if something happens to you, you get life insurance. Because of this insurance, you can get a lump sum to protect your beneficiary’s future and financial needs.
To understand the required amount, you can choose the amount of insurance by keeping some scenarios in mind.
Helps with planning for the future
Life Insurance in College: No matter what you plan for the future, whether it is marriage and children or higher education, getting life insurance as a college student can help make those plans a reality.
With a term plan, you know that your family will not be able to support themselves, even if it is an education loan that your spouse or parents bought for you.
You can plan your future with the help of an insurance policy and understand what kind of life insurance is required in your future.
Provides tax breaks
Life Insurance in College: you can get income tax deductions to get tax breaks when you start earning. Premiums paid to protect the insurance policy can be claimed under section 80C for a tax deduction. This will help you reduce your taxable income and will be useful when you are just starting with a low salary.
With these five benefits, you can now understand whether you should buy life insurance as a college student. Since the benefit of age is on your side, you plan to reap the benefits in the future.
But if you go to get a term plan when you have a stable job and family, it will be too late. This is very important for why you need to ensure early in life.
What types of life insurance are recommended for college students?
Term Life Insurance may be a good fit for college students because it usually only covers the insured for a limited period of between five and 30 years. It may be financially wise to have a term policy when you pay off private student loans.
After the term policy expires, you will no longer receive the death benefit and you will no longer have to pay premiums (unless you want to convert the policy into a permanent life policy).
If you are considering a term policy, you may be wondering: How much does a life insurance cost? Premiums vary based on your age and health, but term life insurance is generally much cheaper than permanent life insurance.
If you are a parent and do not want to take out a separate life insurance policy for your child, some insurers may allow you to include a child rider who can insure your college student in your life insurance policy.
Limitations on child riders are generally lower than what you can get on a separate policy, but if your child does not have much credit, it may be a viable option.
Full life insurance is another option for college students. Whole life policies come with cash value accounts that act as savings or investment vehicles. However, full life policies are generally more expensive than term policies, and many states regulate full insurance for applicants aged 45 and over.