Why Smart Earners Are Buying Life Insurance in Their 20s

Life insurance is often seen as something only older adults need. But smart earners in their 20s are realising the immense value of getting covered early. The perks young buyers gain are significant and shouldn’t be dismissed. Securing life insurance in your 20s is one of the smartest financial moves you can make. Read on to know more about life insurance. 

7 Reasons to Buy Life Insurance in Your 20s

Here’s why getting covered early can be a smart financial decision: 

Locking In Affordable Premiums

In your 20s, you’re likely in excellent health, making you a low-risk (and low-cost) applicant to insure. Premiums are based heavily on your age and health status when you apply. So the younger and healthier you are, the less you’ll pay. 

For example, a healthy 25-year-old is likely to pay much less for the same coverage amount compared to someone in their 40s. Getting insured early with a term plan, such as an ACKO policy or a similar option from a trusted insurer, allows you to take full advantage of lower costs and long-term benefits.

Creating Financial Readiness for Emergencies

Illnesses, disabilities, accidents, and other emergencies can strike at any age. Most 25-year-olds aren’t prepared to cover unexpected medical bills or income disruptions. 

While a life insurance policy pays out the sum assured only upon the policyholder’s passing, many plans offer riders such as critical illness or disability coverage that provide financial support during these unforeseen events. Together, they create a robust backup plan, offering invaluable peace of mind and security for you and your loved ones.

Bringing Peace of Mind

Though loss is a difficult reality that everyone may face, the financial anxiety that follows the loss of an earning member need not be. Life insurance allows millennials to look ahead with optimism rather than worry about the “what ifs”. With life insurance, one can truly live freely and focus on the joys of starting a family, taking risks or leaving a legacy behind.

Tax Advantages

Life insurance policies provide tax perks in addition to life coverage. Under Section 80C of the Income Tax Act, premiums paid towards life insurance policies are eligible for deductions. Moreover, the sum assured paid out to beneficiaries is generally exempt from income tax under Section 10(10D),  provided the conditions specified by the Income Tax Act are met.

Adapting Coverage to Your Changing Needs

One of the biggest perks of getting a flexible plan is the ability to modify your policy as your needs evolve. For instance, when you first get married, a ₹15 lakh term life policy may sufficiently cover your needs. But down the road, if you have children, purchase a home, or accumulate other assets, increasing your coverage to ₹30 lakh or ₹50 lakh ensures all your bases are covered.

Protecting Against Future Health Risks

If you develop a health condition later in life that could impact your insurability, obtaining coverage in your 20s shields you from higher premiums or rejections down the road. This way, it’s easier to get affordable coverage that sticks with you for life. Explore life insurance plans with reputable insurance providers and lock in low premiums while you’re young!

Building Financial Discipline

Starting a life insurance policy in your 20s encourages good financial habits early on. Regular premium payments help develop budgeting discipline and a long-term savings mindset that benefits your overall financial health.

Bottom Line 

Getting life insurance in your 20s is a savvy financial decision that sets your family up for long-term security. When you lock in coverage early, you guarantee affordable premiums. With a life plan in place, you also ensure your loved ones are taken care of no matter what the future holds, whether that means final expenses, debt payments, or more. While no one likes thinking about tragedy striking early, having coverage eliminates the “what-if” worries that many young professionals face as they focus on building their future.