Buying a Term Plan in Your 20s

Should You Buy a Term Insurance Plan in Your 20s?

First things first, buying a term plan is a good option for all ages. However, when you buy it as early as in your 20s, it can be an all the more useful tool.
 

Benefits of buying term insurance in the 20s
 

Still contemplating why, you should choose buying term plan in your 20s? Take a look at these term plan benefits that you can expect:

1. Being 20 will get you a great deal
 

Term insurance premiums rise with age. Thus, buying a plan in your 20s can benefit you more than buying one in your 40s. Also, as your policy premiums will remain the same throughout the policy term for regular plans, you get a substantial cost benefit⁵.

2. You can opt for an increasing cover
 

Another major advantage you can enjoy with a term plan is that you opt for an increasing cover. Here, the sum insured will increase over time, but the premium will remain constant. ³
 

3. Prolonged coverage
 

Your loved ones may depend on you financially. When you buy a term plan at a young age, you can ensure that your dependent will have financial security for a longer time. For example, if Varsha opts for a 40-year policy, she will have life coverage till the age of 67.

4. Tax benefits are an added advantage¹
 

The premiums that you pay towards a life insurance policy offer you tax benefits. A longer plan equals tax benefits for long.

5. Low chances of rejection⁴
 

Though rare, life insurance companies can reject your term insurance application if they consider you a risky applicant according to underwriting practices. For a young and healthy individual, there is very little chance of a policy rejection.

6. Peace of mind
 

Probably the biggest advantage of buying term plan in your 20s is that you can enjoy the peace of mind that your family members will be financially secure, even if something terrible happens tomorrow.
 

Things to consider before buying term insurance in your 20s ²
 

So, all set to get your hands on a term plan, keep these things in mind:

• Make sure you factor in your liabilities, other financial commitments and inflation in mind when you determine the term insurance cover.
• A general thumb rule is that the term plan amount should be a minimum of ten times your annual income plus your financial liabilities and loans.
• Prefer choosing a longer term to safeguard the future of your loved ones for a long time.
• You can opt for term insurance riders for enhanced coverage. However, opt for what you really need.
• Most plans come with three premium paying options: single pay, limited pay and regular pay. Make sure that you choose one that suits your needs.
• Choosing the right term insurance company is important. Make sure to do your research and choose the most well-suited plan from the top life insurance providers in the country.
   

Why is term insurance necessary in your 20s?²

Many financial experts are of the opinion that term insurance plans should be the first life insurance policy that anyone invests in. These plans are not just simple to understand but offer substantial coverage at a very reasonable cost.

As a 20-year-old, you may want to invest and generate returns, but first you should protect your financial goals. Once you feel that you are adequately insured, you can explore as many investment options as you want.
 

Conclusion

Buying term plan in your 20s can be one of the wisest financial decisions you make. Your premiums are at their lowest, and you can safeguard your family for a long time from such a young age!
 

FAQs
 

1. Can a 20-year-old get term insurance?
 

Absolutely. Most life insurance plans are available for people over the age of 18.

2. What is the maximum age for term insurance?
 

The maximum age for term insurance can differ from plan to plan and company to company.

3. Is there a salary limit for term insurance?
 

In India, as of now, there is no such criteria. However, it is highly recommended that you choose a policy that fits your budget so that you can keep paying the premiums easily.

4. Can you buy riders with a term insurance plan in your 20s?
 

Yes, you certainly can. Depending on the term plan you opt for, you can get riders such as accidental death and disability, critical illness rider, waiver benefits, etc.