Why You Should Buy Life Insurance Before You Turn 30

When you are planning things to achieve in your 20s, a life insurance policy may not be on the list. However, it must be. A life insurance policy is usually considered a solution to a mid-life crisis, but that’s an old concept and a vague one. Life insurance is actually one of the smartest decisions you can make in your 20s. You may wonder if you are healthy and energetic, and life insurance can be kept for later phases of life. However, one fact about life is that it’s unpredictable for everyone. Apart from this, a young body means a lower premium for life insurance.

This guide navigates through all the possible reasons why a life insurance policy makes sense for young people. Read on so you can take a little pause and think about your life from a different perspective.

Do Young People Really Need Life Insurance?

One of the very basic questions youngsters often ask is, ‘I’m in my 20s, do I really need to buy life insurance?’ The answer is yes. You may also doubt this from an insurer’s perspective. Well, that’s a misleading concept. Have a look at this data:

  1. In the past few years in India, around 50% cases of heart attack have been reported among people below the age of 40.
  2. Road accidents are one of the leading causes of death globally. Among those aged between 5 to 29 years, accidents are one of the leading causes of death. It claims around 1.5 million deaths annually in India.
  3. Last but not least, the impact of a sedentary lifestyle and stressful work environment also seriously contributes to chronic diseases and poor mental health.

These data are not meant to scare you, but rather to provide insight into what’s happening in the world. Health concerns and awareness about life and health insurance have also increased significantly after the COVID-19 pandemic.

More and more people are becoming aware of the need for smarter financial planning since life and health are unpredictable. Owing to this fact, it is always best to start planning for a life insurance policy as early as you can. Purchasing one before you turn 30 can be a precious gift not just to yourself but especially to your loved ones.

Your Employer Cover May Not Be Sufficient!

If you are an employed individual, you may have life insurance coverage offered by your employer. Do not confuse it with being sufficient for your family’s financial needs. A life insurance policy has to be a calculated and informed decision. Ideally, to calculate the right amount of life insurance coverage, you need to take into account the following factors:

  1. Future financial needs of your family
  2. Ongoing daily expenses
  3. The rate of inflation after a few years
  4. Inevitable future expenses, and more.

Usually, the life insurance coverage offered by your employer may not be able to cover all these elements. So, to ensure your family does not have to suffer financially in your absence, sufficient coverage is crucial. So, think twice, is your employer coverage really enough? Or should you buy life insurance on your own?

Benefits of Buying Life Insurance Early in Life

Above, we discussed some of the reasons why purchasing life insurance early in your life can be a wise decision. Now, let’s have a quick understanding of how purchasing a life insurance policy early in life can benefit you. Some of these benefits are:

1. Lower Premium

Younger adults are more likely to pay lower premiums. This is because young people are less likely to have health problems in comparison to those in their 30s and 40s. If you are young and healthy, the same life insurance policy will cost you less than someone purchasing the policy in their 30s or 40s.

2. Longer Tenure

Some life insurance policies cover you for lifelong or until 70-90 years of age. Purchasing the policy early means you can have it for a longer tenure. With this decision, you can stay relaxed for the rest of your life and have the much-needed peace of mind.

3. Option of Riders

Usually, young and healthy people have enough options for riders with life insurance plans. Riders give you additional coverage at an additional premium. Some of these riders may not be available for older adults or those with pre-existing diseases.

4. Tax Benefits

Last but not least, when it comes to financial planning, insurance plays a crucial role. You may see insurance as a tax-saving investment. When you purchase life insurance, the government also rewards you with tax benefits on the life insurance premium and the benefits that are received.

You may claim up to ₹1,50,000 u/s 80C of the Income Tax Act of 1961. Also, the death benefit remains tax-free u/s 10(10D) of the Income Tax Act of 1961.

Conclusion

Life insurance often seems like something that you need to plan later in life. However, planning early can give you a financial edge in life and better financial security for your loved ones. If you haven’t yet purchased one, get the right plan before you turn 30!