When are Millennials required to take out a life insurance policy?

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When are Millennials required to take out a life insurance policy?

When are Millennials required to take out a life insurance policy?
  • 18th Nov 2019 |
  • 1,974

When it comes to life insurance, it is always considered something that only adults who are above 30 years. Millennials believe that a life policy is something that they will need only after a decade or so. However, it is important that this perception changes. Understanding the implications of a life cover will help you decide if you require it.

Need of life insurance for millennials

The importance of life insurance for millennials depends on the point of whether they have any dependent or not. So, as a millennial, you have to first understand whether your parents’ financial condition would get affected if something unfortunate happens to you. If the answer is yes, you definitely need to consider purchasing a life policy. You will also need it if you are married. This way, your financial liabilities will not be imposed on your spouse.

How life insurance helps

Life insurance is a product that is used to manage financial risks. With such an insurance plan, the policyholder ensures the monetary security of his or her family. The policy provides financial aid to the dependents of the insured in case of his or her untimely death. You can choose from multiple plans depending on your requirements and financial state. Moreover, life insurance policies offer tax benefits under section 80C of the Indian Income Tax Act, 1961.

What kind of life insurance policy millennials should buy?

When you decide to buy a life cover for the first time, it can be rather confusing for you. You have the flexibility to choose from different kinds of life insurance plans depending on your personal needs. You can get a term insurance policy, which comes with a specific tenure. In such a plan, the dependents receive the death benefit only when the policyholder passes away before the end of the term. On the other hand, the whole life policy does not have any specific tenure. The policy stays active throughout your entire life. You need to determine your needs so you can choose your policy wisely.

Things to consider when buying a life insurance

The first thing you need is to determine the amount of cover you need. It depends on a few factors such as your long-term financial goals, monetary liabilities in the form of debts, and the regular household expenses. The death benefit must cover all of these. A general rule that you can follow is to opt for a cover that is at least ten times your annual income.

Also, make sure that you do not overpay. Compare different plans to find an affordable policy.

When to buy life insurance

The need of life insurance depends on your current life stage. Explained below a guide that involves the different stages wherein you should invest in life insurance.

  • Single
  • If your parents, grandparents, siblings, or any other loved one depends on you financially, you need a life insurance policy. It will protect them when you are not around.

  • Married
  • When you are married, your financial liabilities often fall on the shoulder of your spouse in case of an untoward event. The life insurance policy will help your spouse in such a circumstance.

  • Married with kids
  • When you have children, buying a life cover becomes even more important. It can help to pay for their education and wedding expenses in your absence.

    Therefore, there is no specific time to buy life insurance. You need to consider your financial situation and the number of dependents and then make a smart investment decision.

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