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Buying a Term Plan in Your 20s

27-year-old Varsha Sharma was getting a promotion-cum-bonus today. Her boss called her to the office, and while handing over a cheque and a small trophy to her, she asked, “So, Varsha, what are you going to do with this money?” Varsha replied, “Sir, my parents are retired, I am planning to take them and my younger sister on a short holiday as a gift.” “Oh, that’s nice”, he said. “However, if you really want to gift them something, how about you get yourself insured? Buying a term plan in your 20s can be a smart move.” Read More


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Written ByShruti Gujarathi
AboutShruti Gujarathi
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Shruti Gujarathi has 5 years of experience in the BFSI sector, and as Manager – Digital Marketing at Bajaj Allianz Life Insurance, manages digital and content marketing. She has had hands-on experience in content strategy, performance marketing and Strategic Alliances over a career spanning 10 years, with deep expertise in insurance domain.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 14th July 2025
Modified on: 16th July 2025
Reading Time: 15 Mins
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Why Should You Consider Buying a Term Insurance Plan in Your 20s?

Buying a term plan in your 20s can help you plan your finances better. At this age, most individuals are young, healthy, and have limited responsibilities, which can help them get a life insurance policy at a lower premium. Since life insurance premiums are linked to factors such as age , health etc, starting early gives you lifelong benefits, especially when you consider the rising cost of living and unexpected life events. Additionally, the earlier you start, the longer your financial protection lasts, providing security to your loved ones even as your responsibilities grow.


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, subject to plans and insurers terms and conditions. 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 dependents 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.


  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 a 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 20s2

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.


  5. How does the life insurance premium amount get affected by the increasing age ?

    As you grow older, the cost of buying a term insurance plan increases. This is because with age, the chances of developing health problems also rises. Insurance companies consider this a higher risk, and may charge more premium..


  6. Does buying life insurance in your 20s ensure lower rejection rates?

    Most young individuals are generally in good health and have fewer pre-existing medical conditions. While age alone doesn’t determine acceptance or rejection, health is one of the factors determining your premium.


  7. Does buying a term insurance plan help save tax?

    Buying a term insurance helps save taxes as the premiums paid for a term insurance policy are tax-deductible under Section 80C of the Income Tax Act, up to ₹1.5 lakh per year (under old tax regime). Also, the payout received by the nominee is tax-free under section 10(10D) subject to certain terms and conditions.


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*Above illustration is for Bajaj Allianz Life eTouch II - A Non-Linked, Non-Participating, Individual Life Insurance Term Plan (UIN:116N198V01) considering Male aged 25years | Non-Smoker | Policy Term(PT)– 30 years | Premium Payment Term (PPT)– 30 years | Sum Assured opted is Rs.1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 5,092. 2nd Year onwards premium Rs. 5,520. Total Premium Rs. 1,65,172 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly instalments (Lumpsum Payout Percentage: 40, Income Payout Percentage: 60). Income payout instalment opted for 40 years | Premium shown above is inclusive of Online Discount only, no other discounts have been considered and exclusive of Goods & Service Tax/ any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

##Tax benefits as per prevailing Section 10(10D) and Section 80C (under old tax regime) of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

**5% Discount applicable for customer's first individual life insurance policy, applicable only on first year’s premium. 5% Discount for salaried customers, applicable only on first year’s premium. 6% Discount on online purchase is available for regular premium payment and limited premium payment frequency on first year's premium.

$Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium means total of all the premiums paid under the base product, excluding any extra premium and taxes, if collected explicitly.

Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any Call made, including via Voice over Internet Protocol & WhatsApp, SMS or WhatsApp messages, in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

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Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


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The views stated in this article are not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read the sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale. Bajaj Allianz Life Insurance Company Ltd., Regd. office Address: Bajaj Allianz House, Airport Road, Yerawada, Pune - 411006, Reg. No.: 116, CIN: U66010PN2001PLC015959, Call us on toll free No.: 1800 209 7272, Mail us: customercare@bajajallianz.co.in

Tax benefits as per prevailing Section 10(10D) and Section 80C (under old tax regime) of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

BJAZ-WEB-EC-16102/25

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Disclaimer

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

X
Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

Please refer to BALIC Privacy Policy

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Disclaimer

%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

X
Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


X
Disclaimer

*Above illustration is for Bajaj Allianz Life eTouch II - A Non-Linked, Non-Participating, Individual Life Insurance Term Plan (UIN:116N198V01) considering Male aged 25years | Non-Smoker | Policy Term(PT)– 30 years | Premium Payment Term (PPT)– 30 years | Sum Assured opted is Rs.1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 5,092. 2nd Year onwards premium Rs. 5,520. Total Premium Rs. 1,65,172 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly instalments (Lumpsum Payout Percentage: 40, Income Payout Percentage: 60). Income payout instalment opted for 40 years | Premium shown above is inclusive of Online Discount only, no other discounts have been considered and exclusive of Goods & Service Tax/ any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

##Tax benefits as per prevailing Section 10(10D) and Section 80C (under old tax regime) of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

**5% Discount applicable for customer's first individual life insurance policy, applicable only on first year’s premium. 5% Discount for salaried customers, applicable only on first year’s premium. 6% Discount on online purchase is available for regular premium payment and limited premium payment frequency on first year's premium.

$Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium means total of all the premiums paid under the base product, excluding any extra premium and taxes, if collected explicitly.

Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

X
Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any Call made, including via Voice over Internet Protocol & WhatsApp, SMS or WhatsApp messages, in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

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