The millennial penetration of the responsible earning population is increasing at a greater pace. After going through the important educational phase and moving towards planning for life’s important goals, it is essential for millennials to realise the need for life insurance. While the excitement and concentration of financial spending may be towards exploring different adventures, a fraction of the fund should go to the life insurance policy. And, here is why it is extremely necessary!
Reasons Why Life Insurance Necessary for Millennials
Here are the reasons why life insurance is necessary for millennials:
- Dependent family – During the late 20s or early 30s, you may not realise your family’s dependency on your earnings. It is primarily because your parents might still be earning for their life. However, as they grow older, they might depend on your income for their survival.
Also, as you get prepared for your marriage, your family with spouse and children will again increase your new family’s dependency on your earnings. Therefore, it becomes your responsibility to ensure financial protection for their future in your absence. And life insurance is certainly the ideal option.
- Wealth creation – Insurers have been introducing comprehensive life insurance plans to increase the benefit horizon of the life insurance plan. Comprehensive insurance solutions such as the Unit Linked Insurance Plan provide dual benefits. The insurer will utilise one portion of the premium to provide the necessary life cover and the other to invest in the financial markets. You can invest in the securities market based on your risk profile.
For example, there are equity, debt, and balanced funds for people who can afford high, low, and medium risk. It can yield the necessary returns while ascertaining a life cover to secure your family in the long term. Therefore, it is a profitable option for millennials. And insurers provide a range of fund options with different combinations in the ULIP policy to customise it for individual financial requirements.
- Life insurance for millennials is affordable – Many factors contribute to the premium rate. Age and your health condition are the two most important factors. It is because insurance providers evaluate the extent of death risk based on these factors. You are in the best health in your early 20s or 30s with no health complications or pre-existing illnesses.
Therefore, the premium rate is extremely less and affordable in the long run. Also, when you start investing in a life insurance policy at a younger age, you will develop the discipline to invest money regularly for a larger benefit.
- Help reduce the financial burden for the family – We discussed the pointer on the dependent family relying on your income for paying their routine expenses. However, if you have an education loan or are looking forward to a house loan or car loan, you need to devise strategies to repay the debt without introducing financial stress to your family, even at a younger age.
A life insurance plan will provide the death benefit to your loved ones to repay the debt and reduce the financial burden. And, when you invest in comprehensive life insurance policies, you can utilise the maturity benefit to repay the loans and utilise them for your retirement life. And while choosing such product solutions, it is important to ensure flexible features.
For instance, the Tata AIA life insurance plan provides flexible premium payment and maturity payout options to customise the plan based on your income and money goals.
Millennials and life insurance are a rare combination. Many of us might ignore it, consider it an additional expense or feel it is too early to invest in life insurance policies. However, investing in a life insurance policy at an early age can be more affordable, help your family reduce their financial burden in your absence and ascertain financial security for their future. And, when you opt for the investment in comprehensive life insurance solutions, you can create wealth while ensuring life coverage!