Why It’s Beneficial to Opt for a Life Insurance Plan in Your 20’s

Being in your 20’s is a very different and new experience of life. Everybody starts considering you as a grown up and you start realizing the difference between the life as you know and the real life. You make decisions on your own, sometime you fail and start again by learning from your own mistakes but you never give up. Life in 20’s is the most learning and experimental stage, as it is an artistic part of life.

Decisions taken in your 20’s can have an impact on your whole life, like the career you choose, the job you get, the friends you make, etc.. A financial planning comes in the same category. A proper financial planning done in your 20’s can make your whole life stable, but most of the people miss the most important part of financial planning, which is an insurance policy. A life insurance policy is the best option for young buyers and it provides numerous benefits for people in their 20’s.

So through this article we will try to understand the benefits of buying a life insurance policy in their 20’s.

Low Premium

One of the biggest benefits of buying a life insurance policy in your 20’s is low premium rates. The insurance companies decide the rate of premium on your age. An advanced age is a sign of increasing health issues and higher chances of claims. That’s why old people are charged high rate of premiums. In your 20’s, your health is at its best state and the chances of falling ill is also less likely and with less liability with young buyers, companies offer low rate of premium for them. A term insurance policy of 1 crore for 30 years policy term will cost Rs.8, 387 (annual premium) for a 24 year old buyer living in Delhi, while the same term insurance policy will cost Rs.13, 302 for a 34 year old person living in Delhi.

Longer Coverage

Buying a life insurance policy early allows you to enjoy longer period of cover. If you will buy a life insurance policy at the age of 25, then you can enjoy the coverage benefits for a longer duration say for almost 45 years where as if you buy a life insurance policy at the age of 35, your coverage period will be less than 35 years (in both cases the maximum maturity age of the plan being 70 years). Longer period of cover makes sure that you are financially secured at most of the stages of life. Unfortunate events can occur at any stage of life so it’s always better to be prepared for such eventualities.

Large Sum Accumulation

A life insurance policy offers you one of the best saving and investment option. If you will buy a life insurance policy at an early stage, you will get the benefit of compounding and will be able to accumulate higher sum because of longer policy term. So buying life insurance policy at an early stage will give you a large sum assured in comparison to policy taken at an advanced age.

Cover against Outstanding Loans

In your 20’s, you may have an education loan taken by your parents. Paying loan is a very big responsibility and in case of your demise, the burden of loss will be added up by the burden of loan also. Imagining such a situation can be a nightmare for anyone. Buying a life insurance policy allows you to cover the risk of loan and debts. A term insurance policy taken for the same number of years as per your outstanding loan term allows you to minimize the risk of loan and debts. Always choose a higher sum assured than your amount of loan.

Long Term Goals

Being in 20’s, people plan a lot about their future because they know that they have ample amount of time for achieving their long term goals and long duration for saving also. A Life insurance policy can act as the best tool to achieve long term goals. Whether you are planning to buy your dream car after 10 years or planning to buy your own house after 20 years, a life insurance policy allows you to achieve all your long term goals easily. Even if you have some plans for your retirement, you can opt for life insurance policy, which will act as a perfect retirement tool also.

Buying life insurance policy in your 20’s gives you a lot of benefit. While most of the young people ignore life insurance policy as they relate it with an advanced age, but they don’t realize the endless benefits of life insurance policy offered to young buyers. Make a smart move and buy the best life insurance policy for you in your 20’s.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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