Buying Term Life Insurance For Millennials: Know 5 Benefits

It is a time when a great number of the Indian population accounts for millennials, or those who fall between ages of 22 to 32 years in 2020. Due to this, a large number of insurance products today are aimed at millennials. The young generation is more averse to taking financial risks either by investing or beginning their own startups. This is because at such a young age, there are less liabilities and they’re in a better position to face the consequences of those risks.Because of these reasons, millennials today are in an age bracket that is best suited to buy term insurance. Term insurance is nothing but a life insurance policy with a limited tenure, which can be anything between 5 to 40 years. To know the excellent benefits of a term insurance policy for millennials, read on.

We all know that when it comes to life insurance or term insurance, the age of the applicant plays a huge role in deciding the premium amount. The lesser the age, the lesser will be the premium for quite a significant sum assured. This makes term insurance one of the most cost-effective tools for millennials, who can get life cover as high as Rs. 1 crore for attractive premiums. What’s more, premiums also remain the same for a longer period of time because of the young initial age.

The sum assured by the term insurance policy can take care of all the financial needs of one’s family. This is extremely helpful especially for millennials, because in most cases they’re the sole breadwinners of the family and the assured sum is granted to their nominated family member.

A high percentage of millennials are unmarried and have relatively lower expenses. This leads to a higher disposable income that can then be used for various investment options and insurance policies. With lesser liabilities and responsibilities and more funds in hand, a term insurance can be a healthy opportunity.

An insurance policy goes a long way in improving your credit score, and financiers are more likely to approve loans of millennials if they have an active term insurance policy. This is because their major concern when approving loans is loan non-repayment. And a term insurance ensures that even after you pass away, your existing loans can be paid off by using the death benefit. Thus, a term insurance can be used as leverage when applying for home loans or car loans to get the best deals.

Term insurance provides excellent tax benefits and for millennials, this can be a godsend because one is still finding a footing financially, some funds saved from income tax can be a big relief. According to section 80C of the Income Tax Act, premiums paid for term insurance can be deducted from taxable income up to Rs.1,50,000/-. More so, the maturity benefit is also eligible for tax exemption under section 10(10D) .

Thus, it is evident that a term insurance is one of the best options for financial security for millennials. Their young age and few liabilities allow for low premiums and a high life cover. When compared to other tools used to lessen financial burdens, term insurance comes out on top.ULIP or Unit Linked Insurance Policy can also be an excellent option if one wants to invest and get life insurance at the same time. So, if you’re a millennial, don’t wait for premiums to get high and get your term insurance plan at affordable rates today.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.