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How to Choose Term Insurance in your 20s?

Starting early never hurts anyone. This is specially true of life insurance, where there are a heap of benefits that accrue if you start investing in it early in life. Financial prudence says the 20s are the best time to opt for a term insurance plan as it is light on the pocket and gives a lifetime of peace!

To delay is to regret

You may not always be around to take care of your family. And that’s when a term plan ensures your family is well protected.

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Term Insurance

Why buying term insurance in your 20s is a wise decision

Term Insurance Plan in 20s
February 29, 2024

Table of Content

 

Unlike earlier, young people in their 20s are far more aware of happenings around them, thanks to the eruption of social media and a globalised world. Not only are they ambitious, but they also want to be at the forefront when it comes to building their financial corpus. No wonder, one of their biggest priorities is to ensure financial security not just for themselves but also their family members.

That’s where a term life insurance plan helps. By paying regular premiums, policyholders can ensure their family members receive a death benefit, in case the breadwinner loses his/her life. Increasingly, those in their 20s are opting for this plan.

Reasons to buy term insurance in your 20s

There are several reasons why buying term insurance in your 20s is a good plan:

  • Lower premiums:

    You have age on your side and that means if you start early and go for a term insurance plan, you won’t have to shell out large amounts for the premiums. That’s because most people in their 20s are healthy and do not have chronic illnesses. The healthier you are, the lower the premium you pay. At the same time, you will receive all the financial protection you need for your family.

  • Easy to buy:

    Unlike the past, buying insurance is a matter of a few simple steps. Make sure to compare the features and premiums of various insurance plans, before you arrive at a final decision. You can also check the premium you need to pay, with the help of a Term Insurance Calculator that is offered by several insurance providers.

  • Long term financial protection:

    Of course, if you buy a policy in your 20s, you are likely to be protected in the long term. You can opt for a policy that runs for 35 to 45 years, so that you have enough peace of mind for the future.

  • Lower rejection rates:

    Age is a huge consideration, when it comes to buying term insurance plans. In case you are much older, say above 60, the chances of a rejection increase. This is largely because of chronic illnesses. In your 20s, that’s not a cause for concern in any way.

  • Financial security to dependents:

    This is the primary goal of getting a term insurance plan. In case you are the only earning member in your family, this will help them in case you die under unfortunate circumstances.

  • Income tax benefit:

    Apart from financial protection, buying a term insurance plan can help you save tax under Section 80C of the Income Tax Act.*

  • Provision of riders:

    Insurance providers also offer an option to add riders for an added layer of security, including disability, critical illness, or accident cover.

Why is term insurance necessary in your 20s

Buying term insurance in your 20s is a good decision for several reasons. For one, it offers financial protection to your family members if you lose your life during the tenure. You don’t have to worry about them compromising on their lifestyle, even in your absence. Moreover, getting adequate coverage at affordable premiums can only happen at an early age, and that’s why it’s the best plan to go for a term policy in your 20s.

At the same time, you can also save tax by claiming the premium amount as deduction under Section 80C of the Income Tax Act.

Things to consider before buying term insurance in your 20s

  • Calculate the term insurance coverage you need for your family
  • Decide the tenure of your plan. We suggest a long-term plan like 35 to 45 years, so that you have peace of mind for the years to come.
  • Choose your riders wisely based on what you may actually need
  • Check the claim settlement ratio of your insurance provider

FAQs

1. Should I get term insurance in my 20s?

Definitely. The earlier you sign up for a term insurance plan, the greater the financial protection for your family members.

2. Does buying a term insurance plan help save tax?

Yes. You can save tax by claiming the premium amount as deduction under Section 80C of the Income Tax Act.

3. Does buying in your 20s ensure lower rejection rates?

Yes. In case you are much older, say above 60, the chances of a rejection increase. This is largely because of chronic illnesses. In your 20s, that’s not a cause for concern. 

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.

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Disclaimers

##Individual death claim settlement ratio by number of policies as per audited annual statistics for FY 2023-24.

#Provided we have received all the relevant and required documents and no further investigation is required. Claim settlement process would be completed within stipulated timelines once the claim request is approved

^ Available under Life & Life Plus plan options

*As per Income Tax Act, 1961. Tax benefits are subject to changes in tax laws.

ARN - ED/05/23/1870