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Why life insurance is important to Millennials? Research Team | Posted On Wednesday, July 04,2018, 06:54 PM

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Why life insurance is important to Millennials?




One of the many reasons why millennials don’t buy life insurance is because they think they are young, healthy and don’t have kids. But, if you are avoiding a life insurance plan because of these reasons, it is high time you change the way you look at life.

Availing a life insurance plan is no longer a luxury, it is a necessity. The younger you are, lesser are the premiums. This is because you are healthy at this age. You will be a low-risk client for a life insurer. This makes it easy for you to get life cover at an affordable price.

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Why is Life Insurance Important to Millennials?


Following are the reasons life insurance is important to millennials:


1. You don’t want to leave behind debts for dependents:


What happens if you have loans, say a home loan? This is a long-term commitment involving costly EMIs. What happens on an unexpected demise? These loans have to be paid back. So, it’s best to avail a life insurance plan and name your dependents, spouse, parents or children as beneficiaries.


2. You have children:


Insurance is all about getting coverage in unexpected situations. You have young children, whose education is your responsibility. Whether you are the sole breadwinner or have a working spouse, the importance of education, current employment situation and inflation makes it even more important to provide for your children with high quality education.


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3. Not only your children, you have other dependents:


When people think of dependants, they usually mean children. But, are children the only dependents you have? No, your spouse and parents are also your dependents. Won’t their life take a twist in your absence? Think, can they live comfortably without your monetary protection?


4. Life insurance is inexpensive:


The chances of critical illnesses at a young age are relatively low. Therefore, insurers charge lower premiums. If you avail life insurance in the future, you will be paying more than what you will be charged now. So, lock in those low premiums and enjoy coverage of a good life insurance policy.


5. Young doesn’t mean you are free from risks:


You may be fit and fine. But given the lifestyle, you never know when stress, bad eating habits and so on can cost you. A sedentary lifestyle and unhealthy food habits, put you at risk of developing lifestyle diseases like diabetes, heart disease, stroke, and so on. Therefore, it is good to be on the safer side by availing a life insurance policy.


6. ULIPs offer dual benefits:


ULIP stands for Unit Linked Insurance Plans. It is a life insurance product that provides risk coverage along with investment options. You pay a premium on the monthly or annual basis, based on the type of ULIP. A small portion of the premiums are allocated towards various charges of the ULIPs like administrative, mortality charges, and so on. The insurer pools the rest of the premium from all the policyholders and invests in equity, debt or hybrid funds, according to the funds chosen by them.


7. It helps in financial planning:


Whether you dream or not, to be a millionaire, you need to plan your finances well. Without planning, achieving any goal or realizing any dream is not possible. Therefore, plan well. You may avail an endowment life insurance plan, which gives you survival benefits. On maturity, you will have a lump sum amount which you can reinvest.


8. Life insurance is not an expense, it is an investment:


Life insurance is not expenditure but an investment, the benefits of which will be reaped by your beneficiaries or dependents.


9. It teaches you discipline:


When we speak of life insurance as an investment, we talk discipline. Saving money is not easy, but once you start planning your investments, you will realize that all it takes is planning. You will start saving more and investing in a disciplined manner.


10. Tax benefits:


This should probably be the last reason why you avail a life insurance plan. But, the benefits are benefits. Hence, you might as well, claim the premiums that you pay towards the life insurance policy, as a deduction under Section 80C of the Income Tax Act.

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