Why Every 25+Year-Old Should Consider Life Insurance?

Turning 25 is an important milestone in life. It is usually the time to start a promising career, make marriage plans, or make major financial decisions. During these transitions, there is an important aspect most young millennials forget about in Indian society: insurance. You may say to yourself, "I'm young, healthy, and just getting started; why do I need life insurance now?"

Well, the answer is simple: securing your future starts with early planning, and life insurance keeps you out of stress and provides security to you and your family. In this blog, we'll discuss some reasons why every 25+year-old in India needs to consider life insurance and the major life insurance benefits for millennials.

Why Get Life Insurance So Early?

At 25, you may feel invincible. After all, you're just starting your career, perhaps without dependents, and health concerns are apparently a long way off. But this is precisely why one should think about life insurance benefits: the earlier you purchase it, the cheaper it becomes. You'll pay much less when you are young and in good health.

Besides, life is unpredictable. Even though you may not have dependents now, life changes very quickly. Marriage, children, or even ageing parents who may depend on your income are part of the changes that come with life and may require financial protection.

7 Life Insurance Benefits You Cannot Ignore

Here are some of the most important life insurance benefits every 25+ year-old should know about:

1. Financial Protection for Your Loved Ones

   Although you might not have any dependents now, it is always good to plan for life. Life insurance provides protection to your family when something unfortunate occurs beyond the expectations of life. This is because the policy payout covers all your dependents, from loans, debts, or living expenses.
   Term Insurance is one of the most economically viable options for millennials in India. Term life insurance benefits you by giving a huge sum assured for a lower premium to make sure your family maintains a good life even when you are not around to support them.

2. Tax Benefits

   Tax benefits are among the best life insurance benefits. One of the advantages of life insurance in India is tax exemption under Sec 80C and under Sec 10 (10D) of the IT Act. Payment of premiums for life insurance is allowed as a deduction from your income, thus reducing your taxable income and, consequently, your liability to pay income tax. The amount allowed as a deduction is ₹1.5 lakh per year. Further, the payout received by your beneficiaries is tax-free, making it a win-win investment.
   So, for a 25-year-old just starting their career, this may be a great way to save up on taxes while securing your future. Be it a term insurance or a traditional life insurance plan, both offer tax benefits that help people to manage their finances better.

3. Life Insurance as an Investment Option

   If you think of life insurance only as a tool to safeguard your family in your absence, you're missing out on the long-term life insurance benefits of wealth creation. Plans like Endowment Policies or Unit Linked Insurance Plans combine protection via life insurance with the benefits of investment. These plans ensure that your family is financially protected and help you build a corpus over time for other future financial goals, such as:
   • Buying a home
   • Funding your child's education
   • Planning your retirement
   • Buying a car

   Also, ULIPs let you invest in equity, debt, or balanced funds, depending upon your risk appetite, thus helping your money grow over the years. Since the time horizon is longer in the case of early starters, their invested amount gets more time to grow and hence yields higher returns.

4. Coverage for Critical Illness and Health Expenses

   One of the most overlooked life insurance benefits is that you can add a critical illness rider. The cost of medical treatment in India is increasing with each passing day, and a sudden critical stage illness may wash out your savings at any time. Critical illness rider, when added to the life insurance policy, ensures protection from high-cost treatments for conditions such as cancers, heart disease, or kidney failure.
   It may seem unnecessary at 25, but a critical illness can strike you at any age. Having life insurance to cover such costs is good.

5. Life Insurance is Affordable

   One of the major misconceptions young people have about life insurance is that it's too expensive. However, if you buy life insurance in your mid-20s, you will enjoy much lower premiums. The price of life insurance increases with age because the tendency of health complications goes up with age.
   For example, a 25-year-old can get term insurance for ₹1 crore for as little as ₹ 500 per month. This little investment will go a long way in offering considerable financial protection, thus being pretty inexpensive to secure his/her future. You can use a Term Insurance Premium Calculator to find out how much you’ll be paying as premiums for your life insurance.

6. Helpful in Developing Financial Discipline

   Your mid-20s is that phase of transition when you are getting into full financial independence. This is the time when you start accumulating assets and taking on certain responsibilities. Life insurance ensures that your loved ones do not bear any financial liabilities in case something happens to you.
   Besides, this instils financial discipline. By paying periodic premiums, you learn to budget and plan for future long-term monetary goals. It is an early step to being more financially responsible.

7. The Sooner, The Better

   The more time you wait for life insurance, the higher your premium will be and the less eligible you might get for some policy types. When you buy life insurance at 25, you're locking in your premium rate for however long you hold the policy. This ensures that you will not be concerned about potential health fluctuations as you get older.
   Moreover, the earlier you buy life insurance, the longer the term of life insurance covers. It also gives you more time to accrue your policy's savings or investment component in case you opt for an endowment policy or a ULIP.

Final Words

Opting for a life insurance policy is one of the smartest financial decisions anyone can make in their mid-20s. There are various life insurance benefits for you if you opt for one. Other than keeping you safe financially, a life insurance policy can help you save money on taxes and unlock more investment opportunities. Plus, the earlier you start, the cheaper your premiums are.

PNB MetLife offers life insurance options that grow with you and safeguard your loved ones. So, take the next step toward securing your future and get a life insurance or term insurance plan today!