What Life Insurance Should I Buy in My 20s?
Life Insurance is a good financial tool that helps you be better prepared for the worst times. The short answer to the question ‘Should I buy life insurance in the 20’s’ is ‘YES’.
At the age of 20+, most people across the world are thinking about making a dent in the universe. Apart from making a mark by fulfilling the career ambitions, 20 is the ideal age to start investing in a good life insurance plan. Life Insurance is a good financial tool that is ideal for everyone who wants to be well-prepared for the ‘what-if’ moments.
Along with working on building a good career, youngsters at the age of 20+ should also build a financial portfolio by investing in a good life insurance plan. Life Insurance is a good financial tool that helps you be better prepared for the worst times. The short answer to the question ‘Should I buy life insurance in the 20’s’ is ‘YES’.
There are numerous reasons why investing in life insurance at a young age makes utmost sense!
Insurance Premiums are cheaper when the applicant is young, hale, and hearty
A majority of the people are hale and hearty in their 20’s. Before the applicant can opt for particular life insurance, the insurance company accesses the health of the applicant. The primary aim of the assessment is to look at the associated risks of offering insurance to the applicant.
Lower the health risks, higher could be the insurance coverage. Younger people are lesser prone to chronic diseases (if they did not have any underlying conditions since their childhood) that equates to lower monthly premiums with no exclusions.
Coverage for a longer period
The main intention of investing in a good life insurance policy is to have financial security for different stages in life. When you are opting for a life insurance policy in your 20’s, you can enjoy the coverage for a longer duration (close to 50+ years).
On the other hand, financially securing yourself with life insurance at a later stage in life (e.g. at the age of 30+), your coverage will be less than 40 years. When you are young and healthy, you can capitalize on the benefits offered by life insurance.
Inculcating Financial Discipline
People in their 20s would have taken baby steps in the corporate world. Hence, it is easy to get into the vicious circle of spending mindlessly by ignoring the finances. It is important to inculcate financial discipline at an early stage so that you can save a significant part of the salary.
When you invest in life insurance at an early stage (i.e. in the 20s), you are inculcating financial discipline in your lives. Needless to mention that you would witness the benefits of this habit at a later stage in your life☺
Which life insurance policies should you invest in your 20s?
There is an option to invest in term life insurance which is the simplest type of life insurance policy. However, it pays the nominee in case the insured person dies during the policy term.
ULIP (Unit Linked Insurance Plans) is the best bet when you are investing at an early age. ULIPs are different from term insurance plans since the policy pays the amount on your death. It also pays the maturity amount if you survive the policy term. ULIPs offered by ICICI Prudential Life Insurance invests in funds and gives complete freedom to the policyholder for choosing the type of fund where the money should be invested.
Young investors can also invest in endowment plans as well as non-participating non-linked endowment plans.
Investing in a life insurance policy at an early stage keeps you financially secured for later stages in life. In case of any unfortunate incident (e.g. untimely death), life insurance provides the option of giving a steady income to your family (or dependents) even after you are gone
We close this blog with the following quote:
If we never save money or invest we will always be poor, no matter how much we earn