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Why One Must Buy Term Insurance before 25 Years

A term insurance plan is a great investment to help you cope with the uncertainties of life. Read ahead to learn the various benefits of buying a term plan early.

  • 5,047 Views | Updated on: Feb 27, 2024

When you are in your early 20s, insurance is probably the last thing that bothers you. This is quite understandable as right now you do not have too many responsibilities. The purpose of this article is to remind you that you will have many duties towards your family down the line. Therefore, it is also important to start preparing for the future as soon as possible.

Key takeaways

  • Buying the term insurance plan early offers a lot of flexibility.
  • Provide financial security to the policyholder’s family.
  • A significant advantage of purchasing term insurance before the age of 25 is the cost-effectiveness of premiums.
  • Purchasing term insurance at a young age provides you with peace of mind.

A term insurance plan is one of the policies that you need right away. This is a great investment to help you cope with the uncertainties of life. There are various great benefits of buying a term plan early. Some of these are explained below.

Reasons to Buy Term Insurance Before 25

While many young adults may not consider life insurance a pressing matter, buying term insurance before the age of 25 can be a smart and financially prudent decision. Here’s why.

Affordable Price

One thing that determines the price of the term plan is your current health condition. When you are under 25 years old, you are in the pink of your health. Although you never know when you can be diagnosed with a critical illness, the chances are that it is far away from you. For this reason, insurance companies offer more affordable premiums to younger people.

If you are in your early 20s and do not smoke, you can get a cover of approximately ₹1 crore for a monthly premium of around ₹500. The same coverage will cost you double in your 30s. Hence, it is always the smartest idea to buy an online term plan early.


Buying the term insurance plan early offers a lot of flexibility. It is understandable if you are a little confused about your finances right now. It takes some time to figure out what to do with your money. With a term plan, you will have the flexibility to stop the payments and terminate the policy at your convenience. Some insurance companies allow the policyholders to renew the plan later. These flexibilities surely make your job easier.

Helps Your Family to Deal with Your Loans

The main purpose of a term plan is to provide financial security to the policyholder’s family. A person under 25 years old might not have too many financial liabilities, but they might still have loans to pay. Imagine someone buys a new bike and has to repay the loans for the next five years. In case of an unfortunate death, their family has to repay the remaining loan amount. This can be an added burden, along with the pain of losing a loved one. However, if he or she takes a term plan, then the family could use the death benefit to repay the loan easily.

Locked Premiums

The premium of a term plan is locked. This means once you buy the policy, you will have to pay the same amount of premium until the end of the term. As you get a cheaper premium when you are young, buying the term plan before turning 25 will ensure that you pay a low premium even when you are older.

Added Risk Protection

Term insurance policies also allow you to add riders. Riders are optional benefits that provide additional protection against certain risks such as accidental incapacity, diagnosis of a severe illness, and so on. You can pick riders for an additional fee. Furthermore, you will not be required to complete any other paperwork or medical testing besides those required for your primary insurance.

Long-Term Financial Protection

Life insurance is not just for your benefit; it provides financial security to your loved ones in the event of your untimely demise. When you buy term insurance early, you ensure that your family is protected for an extended period. Term insurance policies typically offer coverage for 10, 20, or 30 years, depending on your choice. Purchasing a 30-year term policy at age 25 can provide coverage until you are 55, ensuring your family’s financial stability during your prime earning years.

Future Insurability

Your health is likely to be at its best in your early twenties. Unfortunately, as you age, health conditions can develop, making it more challenging to qualify for life insurance or leading to higher premiums. By securing term insurance early, you lock in coverage while you are in peak health. This ensures that even if your health takes a turn for the worse later in life, you will have a policy in place to protect your loved ones without worrying about exorbitant premiums or being denied coverage.

Peace of Mind

Lastly, purchasing term insurance at a young age provides you with peace of mind. Knowing that your loved ones will be financially secure if the unexpected happens can alleviate the stress and anxiety associated with life’s uncertainties. It allows you to focus on building your future without the constant worry about what might happen to your family if you’re not around to provide for them.

Final Thoughts

Now that you understand why you need to buy the policy early, look for online term insurance that meets your requirements and apply for it without wasting any time. Buying term insurance before the age of 25 is a financially savvy decision that offers numerous benefits. It provides cost-effective premiums, long-term financial protection, and peace of mind. Additionally, it safeguards your loved ones from the burden of your debts and ensures future insurability, even if your health deteriorates later in life. Ultimately, securing term insurance early is an investment in your family’s future and financial security, making it a decision well worth considering as a young adult.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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