Term Insurance for Millennials

Why Should Millennials Choose Term Insurance?

Term insurance is helpful for millennials who are getting married, having kids, taking care of aging parents , managing various responsibilities and want to protect their families financially. IThe plan offers many benefits, such as:

Financial Protection

Term insurance helps the nominee if you die unexpectedly during the policy term. It gives them a payout called the sum assured. This money can help cover their families' daily expenses, rent, education costs, and other needs. For millennials, this is very helpful as many are still building their savings. It gives your family a financial cushion during tough times.

Repaying Loans

Millennials may have education loans, personal loans, home loans or credit card bills. In case of their unfortunate demise, these debts can trouble the family. The sum assured from a term insurance plan can help the nominee repay these loans without worry.,

Tax Benefit

A term insurance plan not only provides financial security but also can help with effective tax planning.

You can claim deduction of up to ₹1.5 lakh on the premiums paid towards life insurance ,under Section 80C of the Income Tax Act (applicable to individuals who have opted into the old tax regime). This reduces your taxable income and will decrease your tax liability for the year.

Secondly, if a nominee receives the death benefit, it is exempt from tax under Section 10(10D), regardless of which tax regime a taxpayer has chosen. This means the family will receive the full benefit of the funds without any deductions.

Using a term plan lets you financially protect your loved ones while also making the most of available tax benefits—a smart and responsible financial move as you navigate adulthood.

When Should Millennials Purchase Term Insurance?

Here are some instances when millennials should consider getting a term insurance:

• When you start earning: Once you have a steady income, buying term insurance helps financially protect your dependents.
• When you get married: If your spouse depends on your income, a term plan is important to ensure their financial safety in your absence.
• When you take out a loan: Term insurance can protect your family from the burden of repaying large loans like home or car loans.
• When you have kids: A child’s education and future need planning. A term plan can ensure their life stays financially secure.

Term insurance sets the base for a secure financial life. Along with savings, retirement planning etc, term insurance is a key step in financial planning before 40.

Conclusion

Buying term insurance for millennials is one of the smartest steps they can take. It gives security to their loved ones and fits well into a long-term financial plan. With affordable premiums and tax benefits, term insurance is a smart choice. Life is full of surprises, but planning early can reduce stress later. So, whether you are starting your first job or thinking about your family’s financial future, term insurance is a strong and simple choice to protect what matters most.

FAQs

Can millennials still get term insurance if they have pre-existing health conditions?

Even if you have health conditions like diabetes, asthma, or high blood pressure etc, you can still get term insurance. The insurer may require medical tests and details related to your health. Your premium might slightly higher. It is crucial to be honest about your health , as concealing information may lead to claim rejection.

Is term insurance the only type of life insurance available to millennials?

Term insurance is not the only option. Millennials can also buy other types of life insurance plans like whole life plans, endowment plans, or ULIPs etc. These plans may offer savings, returns, or market linked investment benefits.

What is the minimum age for purchasing a term insurance policy?

You can usually buy a term insurance plan when you turn 18, as that’s generally the minimum eligible age. Buying early helps because the premiums are typically lower, as you are healthier.