The growing need of term insurance for millennials today

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What are your top priorities when you are in your mid-twenties? A job, higher education, some leisure holidays and more. But never does the thought of investments crosses your mind. Making the right financial investments is crucial in shaping your future for retirement

India’s demographics has a third of its population as millennials. They contribute to almost half the workforce in this country. These millennials have their lives on the internet and the internet is the place where it all begins. The digital revolution in the nation has made it even more conducive to live on the internet. It involves everything from buying houses to investing your hard-earned money. This is why getting an insurance plan is important while juggling your other financial goals.

How much life insurance do you need? It depends on these factors

With a plethora of different insurance policies to choose from, which is the perfect plan?

The answer to this question is determined by the needs of the individual. But most millennials prefer to buy term insurance plans.

What is term insurance?

Term insurance is an insurance policy that covers you for a specified policy duration. It can differ among the various plans offered. Your insurance plan offers death benefits to the nominees and there are no maturity benefits. These term plans offer a safety net to your dependents.

Here are some term insurance benefits that must not be missed by every millennial –

Cheaper premiums

A person’s age has a great role in determining the premiums to be charged. At young ages, the chances of suffering an ailment are less to almost none. This is why a millennial in 2020 can buy term insurance way cheaper than his older counterparts. The same term insurance plan if bought at a later stage in life might prove to be expensive in terms of premiums for a similar amount of insurance cover. It is simple, the earlier you buy, the cheaper it is.

Tax benefits

Millennials can also save a handful of their taxes by getting a term insurance cover. A policyholder can avail deductions up to ₹ 1,50,000 under section 80C on payment of a term insurance premium. Moreover, the maturity benefits of term insurance with return of premiums are exempt under section 10(10)(D). These deductions/exemptions are stated in the Income Tax Act, 1961.

Income replacement

Life insurance is seen in its purest form in a term insurance plan. It purely works on the concept of ‘indemnification for loss’. It provides financial security to the dependents in the absence of the policyholder. Hence with an unfortunate demise of the policyholder, your dependents have some financial backing. Your nominees can accomplish their life goals in your absence.

Peace of mind

Every policyholder gets an insurance cover with the sole objective of well being of their families. Every person strives hard to fulfil their families dreams when they are alive but want bare minimum financial protection in their absence. A term insurance plan offers an adequate cover to your family in your absence keeping you at a peace of mind.

Add-On Benefits

Apart from death benefits, you can customise your term insurance plan to offer more comprehensive coverage by availing add-ons. These add-on or riders are available for a marginal premium. Some important add-ons that should not be ignored are accidental disability add-on, critical illness add-on and waiver of premium add-on.

Understanding what is term insurance and its benefits is crucial in making the right choice for every millennial. Make sure you start early and select the best term plan after comparing among different insurance companies.