Your mobile phone must be flooded with ‘congratulations’ and your mail box must be full with ‘good luck’ wishes for your new job. First job holds high significance in an individual’s life which is truly unversalized. Your chest grows by few inches with ecstasy and shoulders get heavy out of major responsibilities. Now that you are earning, it is imperative to get a good hold over your cash inflow. This will add on to responsiveness as well. However, protecting yourself and your family in this early phase is equally important. Followings are the policies can be suggested for a new earner.
Firstly, you need to cover your life. It may sound boring and worthless in these early phase but yes, it is highly important as well. The primary reason is that the sooner you start the more you accumulate by either availing a saving linked life Insurance policy or unit linked insurance policy . Apart from greater accumulation, you get an additional advantage of lesser premium as age of the insured has a large bearing on the premium payable. Depending on your income, a cover comprising a definite sum assured as a pure term plan should be sufficient for you in this phase. Nevertheless, increasing cover as you grow old is highly suggested. Peeping through your future requirements, when you start your family, financial planning and protection of your loved ones top your priority list. Here, adequate policy value should be chosen to take care of future requirements in absence of primary bread earner.
Secondly, a sound health insurance policy should be taken. After joining your first job, you will come to know that your employer is getting you covered in one policy only. However, having a health insurance policy of your own is highly recommended. The very first advantage you can capitalise on is the low premium, as the possibility of serious illness in minimal at this young age. Moreover, you need to insured for unforeseen eventualities. During your transaction period at work, you don’t get covered under any policy; neither by your previous nor by the current employer. So, you need to hold a good policy for such instances. Besides these health covers, health insurance policy renders you tax exemption under section 80D. Minimum cover should lie between Rs. 2 to 5 Lakh in this phase till you get married.
Lastly, the third most important policy suggested is the personal accident cover. The life insurance policy you buy doesn’t cover you against permanent disabilities or situations that incapacitate one to carry on with the job. Such situations should also be taken into consideration. Personal accident cover looks after the finances if insured gets permanently disable out of brutal eventualities and compensates insured accordingly. This policy has also few interesting riders which can be examined. It is highly observed that most youngsters of today maintain either a two wheeler or a four wheeler; which manifests the need for personal accident cover.
The mentioned three policies holds significance in early earning phase of an individual’s life. As one ages, the family gets populated. Policy cover should also be kept changing at every phase of life to secure your finances. As stated before, youngsters of today mostly maintain a two wheeler or four wheeler and they hardly give time to find out whether the same is covered under insurance or not. In India, carrying a motor insurance is mandatory with third party liability cover. One needs to understand the concept of ‘life and non-life insurance’ and plan the entire life cycle of insurance. Most important factor to choose these policies is getting the best one at right age. These policies will undoubtedly protect you and your loved ones without getting your finances harmed.