When you’re in your 20s and 30s, you’re usually immersed in enjoying your newfound independence, building a career, and exploring different opportunities. Amidst all this, insurance rarely makes it to the priority list. Many individuals wonder: Why think about life insurance when you’re young, healthy, and just getting started? Little do they know that this is the perfect time to consider it. Life insurance for young professionals is significantly cheaper, and the low premiums can save a lot of money in the long run. It is one of the smartest decisions for you at this stage.
In this blog, we will explore why you should buy life insurance early for your long-term financial peace of mind. So, keep reading!
Advantages of Life Insurance for Young Adults: Why Is It the Right Time?
There are many benefits of buying life insurance early, such as:
Financial Safety for the Family:
In the unfortunate event of your sudden death, your beneficiaries will get financial aid, thanks to the life insurance. In case you had taken out any educational loans, or if your dependents need assistance with future academic expenses or for regular living costs, the life insurance can help in paying these. Thus, buying life insurance early in life lays the foundation for long-term financial security.
Timely Financial Planning:
Suppose you want to purchase a home in the near future, start your own business, or build wealth. Then, making the right decisions during your 20s is essential. This is the best time to buy life insurance, as it makes your financial strategy more secure. In the years to come, it will not only protect your family but also your major investments.
Lower Premiums for the Same Cover:
The cost of life insurance in your 20s is cheaper. Buying life insurance early allows you to lock in lower premiums. The best part? This premium stays the same for the entire term of your policy. Let us understand this better using an example:
Rohini, a 24-year-old, is buying a ₹1 crore term plan, and may have to pay just ₹13,000 annually. On the other hand, Anisha, a 40-year-old, may have to pay almost double the amount for the same insurance plan. If you’re wondering why life insurance is cheaper when young, the answer is simple: When you’re younger, insurance companies see you as a healthier and less risky candidate.
Your Money Gets Time to Grow:
Many smart insurance policy options support financial planning for young professionals. Some excellent plans include endowment policies, ULIPs, and whole life plans. When you start early, you benefit from compounding. So, even a small monthly premium will offer you a high maturity corpus when it is time for you to retire.
Easier to Customize Eventually:
The sooner you get life insurance for young professionals, the more liberty you get to make adjustments and experiments. Suppose you start with a basic term insurance, and as time goes by, you realize that there are some aspects you need to add, such as:
- Critical illness cover
- Death benefit
- Premium waiver rider
In fact, with growing income, you will also be able to increase your coverage so that it caters to your life goals.
Get Amazing Tax Benefits:
Another good thing about life insurance for young adults is that you get significant tax benefits. When you pay premiums, you will also be eligible for a tax deduction of ₹1.5 lakh (maximum) under Section 80C of the Income Tax Act of 1961. Another advantage is that the maturity benefits you gain from the policy are exempt from taxes (according to Section 10D).
Why Do Premiums Increase With Age?
Choosing life insurance for beginners is better than opting for it at an older age. This is because the premium of your health insurance policy increases with age. There are many reasons for this:
- As you grow older, your immune system becomes weaker, which means your ability to fight infections is reduced.
- With increasing age, policyholders also become more susceptible to hospitalizations. The primary reasons for this are chronic conditions, reduced strength, and deteriorating health.
- Your overall health also declines with age, which makes you a high-risk individual who may need medical care more frequently.
- For improving your health conditions (especially chronic ones), you may even need surgeries, which are very costly. To cover such expensive procedures, insurance companies increase the premiums.
- As you age, the frequency of your OPD (outpatient department) visits also increases. Thus, insurance companies expect that the OPD claims of older people will be higher.
- If you have an injury or illness at an older age, your body will take longer to recover. This means there is an added expense of treatments and therapies.
Conclusion
Opting for life insurance early is a very simple decision, but it makes a huge difference in the future. When you’re young and healthy, it is the right time to lock in low premiums, build long-term financial stability, and give your family a dependable safety net. So, life insurance for young professionals offers many advantages that grow with time. By taking this step now, you can ensure peace of mind for years to come.
If you need help getting the best life insurance for young adults, reach out to the experts at Finvriddhi today!
