Why is age 20 best time to invest in LIC?
Why is age 20 best time to invest in LIC? is a necessary question. LIC premiums are calculated based on your age. As age increases your premium also increases. Also, at a higher age, investing period may reduce. If the Length of the investing period is more, you subsequently get more return on investment. You will be having comparatively lower premium than higher age. Also, At your higher age group may need to get a medical checkup for the approval of your LIC policy.
At age 20, LIC premium for 35 years term is Rs. 26,113 per year and total premium paid for 35 years are Rs. 9,14,529. Return on investment will be Rs. 49,80,000, you can save tax of Rs. 18,15,005.
But For age 40, LIC premium for 35 years term is Rs. 31,173 per year and total premium paid for 35 years are Rs. 10,87,649. Return on investment will be Rs. 49,80,000, you can save tax of Rs. 18,67,284.
In the above illustration, one has to pay Rs. 1,72,940 more to get the same return and also, if you have started in 20’s you will get the return on 50’s. But if someone starts at 40’s then, they receive the return only in 70’s.
In lower age, you will get the highest cover of insurance for a lot less money. Also helps to get tax savings from your first-year salary.
You also get the financial discipline by saving every month. Which helps to take a pre-approved loan in the later stage of your life.