Opting for a term life insurance plan is regarded as a crucial task for everyone wishing to build a robust portfolio with complete financial protection for their loved ones. There are often questions raised by millennials regarding the viability and importance of term insurance for them. Here is a closer look at whether it is worth it for this segment or not.
How Millennials Benefit from Term Insurance
A term life insurance plan offers several advantages to millennials, including the following:
Financial safety for loved ones
Millennials should invest in term insurance to safeguard the financial futures of their loved ones and families. These policies offer guaranteed lump sum payouts to nominees in case of the demise of the policyholder within the policy period. This money will help family members take care of household expenses, maintain their living standards, meet goals like higher education and weddings, and even repay debts and liabilities in case of the absence of the insured person.
Reasonable premiums
Buying a term life insurance plan at a relatively younger age comes with its fair share of perks. Millennials can get a comparatively lower premium for a higher coverage amount since they are perceived to have lower health risks at this stage. The earlier one buys term insurance, the higher the coverage and the lower the premium. At the same time, this helps lock the premium amount which will remain fixed throughout the policy duration. In contrast, buying these plans later on will result in costly premiums for similar coverage amounts.
Tax deductions
Section 80C of the Income Tax Act offers deductions up to Rs. 1.5 lakh on premium payments for term insurance plans. At the same time, the sum assured paid to nominees is also tax-exempt under Section 10 (10D).
Expanding the scope of coverage
Millennials can also strategically use their term life insurance plans to expand coverage through riders. These add-ons like terminal/critical illness, accidental death and disability, hospital care, surgical care, and others, offer wider coverage for varying scenarios for relatively nominal premiums. Health-related premiums are also eligible for tax deductions under Section 80D.
Flexible premium payment options
Millennials can take their pick from various premium payment options, including single payments and even annual, quarterly, or half-yearly premium payment choices.
Customized life coverage
Millennial customers can customize their life coverage as per their current life goals and requirements. They can also scale up coverage later on when their needs start evolving.
Term Life Insurance- Enabling Higher Mental Peace for Millennials
Along with all the above-mentioned benefits, it is also worth mentioning that mental peace is perhaps the biggest takeaway for millennials. They can be assured of financially securing their families and loved ones in the event of any untoward situation down the line. This automatically reduces stress while freeing them up to plan their finances and other investments in line with their desired objectives.
Hence, millennials should opt for term insurance swiftly without any delays.
