A detailed guide to buying term insurance at different life stages
Millennials are not inclined to purchase life insurance policies as their priority lists are already preoccupied with other things. However, if they are working and have financial dependents, they should have adequate life insurance plans that will protect them from any financial difficulties. So, it is advisable to purchase a term insurance plan at a young age to secure the financial expenditure of the family in case of an ill-fated incident with the policyholder. But one should not purchase life insurance policies hastily; rather, they should be purchased based on one’s goals and financial needs. These days, the internet is jam-packed with many life insurance calculators that will help you calculate the insurance coverage amount.
3 imperative reasons millennials should purchase life insurance policies
- Life Insurance is mandatory
- Life Insurance supports you to build corpus funds passively
- Life Insurance provides a life cover and financial security to your family
Life Insurance is mandatory
Life insurance is not an option anymore. Life insurance plans will safeguard not only you but also your family. Because life is unpredictable, and thus, any unfortunate incidents can turn the table. Therefore, life insurance acts as a safety jacket in case of a financial emergency when alive. This policy also protects your family even after the demise of the policyholder.
Life Insurance supports you to build corpus funds passively
Life Insurance policies are the utmost way to build funds. Life insurance is an investment opportunity to create funds. Now, you can utilize these funds for your financial needs at various stages of life. For example, you can purchase a ULIP or a money-back plan as an investment plan or even go for a retirement plan for your retirement planning. You can even use the cumulative funds to repay your debts. But it relies on the type of life insurance policy you have purchased and its maturity value. The prime objective of life insurance is to offer a life cover and financial support to your family in your absence.
Life Insurance provides a life cover and financial security to your family
Life insurance embraces customers with a life cover irrespective of the type of insurance (a whole life or term plan or even a ULIP). But depending on your purchased plan, the life coverage and the tenure will differ. What do you mean by a life cover? If the policyholder dies during the policy tenure, the insurer is bound to pay the death benefit to the nominee as per the policy term. Thus, it offers financial support in case of an unfortunate event.
Working unmarried millennials
Term insurance for unmarried could be the best plan for working millennials, as this policy secures your parents financially in your absence. If you have taken an education loan, then term insurance for unmarried people could help your parents pay back your loan. Moreover, working millennials often get tempted to purchase expensive smartphones or foreign trips with friends; thus, they should go for a one-year term plan. This plan complements the lifestyle of a millennial. They can purchase this plan for one year at an extremely low premium amount. Moreover, the policyholder can change or add a nominee (wife or children) as per his wishes. Term insurance also offers tax benefits.
Married millennials
Married millennials are tied up with responsibilities as they have a home loan, car loan, and they also need to take care of parents and children. Term insurance for married people will benefit them as this policy takes care of your family’s financial responsibilities and offers coverage for loans and other liabilities. Married couples can go for a joint policy that will cover both partners under a single plan. But if they want to protect themselves and enhance their wealth for long-term life goals, then ULIP (Unit linked insurance plans) will give many advantages. If the person wants to take risks and is looking for high market-linked returns, nothing can be better than ULIP. On the other hand, if the person is risk hostile, a guaranteed income plan could be the best.
Millennials with kids
Millennials who have younger children should invest in a term life insurance policy. In case of any unpredicted incidents, the claim money will take care of the family’s financial needs and cover loans (Home loans, car loans, etc.). Therefore, a term life insurance policy can ensure that the family can achieve their dreams and goals without any hassle.
These are different types of term life insurance at various stages of life.
Questions you should ask yourself before purchasing the right type of life insurance
- Evaluate your financial needs: How many dependents do you have? Or are you planning to settle down shortly?
- Take a look at your financial goals: Do you have any plan to open up a start-up, or are you running your venture?
- Consider inflation: Since there is an increase in the cost of everything, consider the time value of money.
- Check different life insurance plans: Each life insurance policy will not cater to all your needs. So, check life insurance plans from various companies and choose the best one.
- Consult with a financial advisor: If you are unable to decide what type of plan would be suitable for you, take assistance from a reliable financial advisor.
Now, you have an adequate idea about life insurance policies and how life insurance plans are beneficial for everyone. So, don’t delay; the earlier you purchase, the lower the premium will be, and you will stay covered for a longer period.
