People born between 1981 and 1996, often called millennials, have reached the point in their lives when they are stabilising their careers, planning their futures, and considering investing in long-term financial investments to secure their lives.
Besides securing themselves financially, they must also consider buying the best life insurance to give them the peace of mind needed to fulfil all their dreams. Let’s use this post to learn additional specifics.
Why Don’t Millennials Buy Life Insurance?
Despite the many life insurance plans available, people investing in them are still on the lower side. Some reasons are listed below:
Perceived Cost
Most young adults consider life insurance an expensive affair since they are already burdened with housing loans, student loans, and other financial obligations. Hence, prioritising immediate finances is more critical for them than buying the best life insurance.
Lack of Awareness
People must understand how important it is to have life insurance. A survey found that 55% of millennials need clarification about how the insurance process works. They also consider life insurance a complicated product with long waiting and approval times.
Delayed Life Milestones
Compared with older generations, millennials marry late and have children even later. This is primarily because of the higher living standards and costs. The need for life insurance is frequently triggered by significant life events like marriage, property, and having a kid. Therefore, those who are delayed in achieving these milestones may postpone getting one.
What is the Need for Life Insurance for Millennials?
Millennials have seen it all – the latest technology, wars, pandemics, and the list can go on. Therefore, they understand why one must invest and secure their future with a life insurance plan. They may protect their loved ones’ futures and help them save for themselves in the event of unforeseen events by getting life insurance.
Whether you live in India or outside, as a millennial, you must understand the reasons below for purchasing insurance for yourself. If you stay outside, you can still buy life insurance for NRIs and secure your future:
- To secure their loved ones financially in case of any uncertain situation.
- To create financial excess, dream big, and fulfil it.
- For securing their partner’s post-retirement future.
- The benefit of being young is getting access to low life insurance premiums.
- Secure their loved ones from debt obligations in case of their untimely demise.
- Securing the funeral cost.
- To raise the amount of insurance benefits that the employer owes.
- To profit from a tax under the Indian Income Tax Act of 1961, section 80C.
Difference Insurance Plans to Opt For
Life insurance is a must in today’s world, irrespective of where you stay. Insurance companies are developing policies catered to individual needs, such as life insurance for NRIs. Consider the following life insurance policies:
Unit Linked Insurance Policy
ULIPs are integrated life insurance plans that divide premium payments between market-linked assets and life insurance for policyholders. Because ULIPs offer life insurance and returns that are on pace with the finest in the business, they can be a great place for millennials to start creating a diverse investment portfolio, mainly because they have greater risk tolerance.
Endowment Policy
Endowment plans offer policyholders a one-time payment in the event of the policyholder’s death or the policy’s expiration. Endowment plans are desirable for long-term investing since they include life insurance coverage.
Term Insurance Policy
Plans for term insurance are ideal for providing pure life insurance without the extras of investments or savings. Term life insurance policies offer a large amount of insurance at cheap rates. These programs do not, however, come with any rewards related to maturity or survival. Millennials might choose term plans if they only want to get life insurance for its own sake.
They provide coverage for the life assured and guarantee that the nominee will get a lump sum death benefit in the event of the life assured’s death. Term plans are ideal if you wish to purchase a reasonable policy and utilise other non-insurance products for savings and investments.
Health Insurance Policy
Health insurance is essential as millennials deal with growing healthcare expenditures and global health issues. It provides access to high-quality healthcare through network hospitals and pays for medical costs incurred when a patient is hospitalised due to diseases or accidents.
Conclusion
Investing early by millennials can help them align their financial goals with their income and changing needs. It is always better to invest early; as time passes, you will get fewer benefits and less time for your money to grow. Investing early will also help celebrate life milestones while mentally and financially preparing for them.