As soon as you start working. Term insurance plans protect your family members who depend on your monthly income, in your absence. Securing your family’s future dreams is one of the priorities of your life. But rising living costs and inflation take away a large chunk of your monthly income – you are left grappling to save money every month, wondering how you can finance your loved ones’ dreams and any emergent expenses.It’s simple: just buy term insurance.

Why buy term insurance?

A term policy is a simple life insurance product that protects the financial future of your family. The plan corpus comes into play on the unfortunate demise of the policyholder – it is paid to the nominated family member(s) in a lump sum payout.

Do note that the term insurance plan does not have a maturity benefit – i.e. you will not receive a payout or bonus if you outlive the plan tenure. Its premise is simple: it safeguards the financial interests of the family when you are no longer there to provide a regular income.

  • The term policy has amongst the highest sum assured amounts across the insurance landscape in India today. The policy may have a sum assured of Rs 1 crore or more, depending on the plan features, policy provider and your income profile.
  • But because the plan has a high sum assured, it does not automatically mean that the premium payment is high. In fact, the premium is amongst the lowest across insurance products in India today. The term insurance plan is amongst the most affordable life insurance options.
  • Its affordability makes it a viable option for those who wish to invest in life insurance with an inexpensive plan.

Which brings us to the next point… Why buy a term policy in your 20s?

Though you may buy a term insurance plan any time between the ages of 18 and 65 years, it is best to buy it in your early 20s. Allow us to outline the reasons for this:

  •  Since you have just started out in your career, it is safe to assume that you are not yet earning enough to be counted in the high-income bracket. You have a relatively low income and several expenses to meet. At the same time, your family may be dependent on your income. A term policy can protect your family in your sudden absence, while not burning a hole in your pocket (see the point on less premium for higher payout above)
  • Insurance providers in India are pleased to offer term insurance plans to healthy applicants in their 20s, who have a regular source of income. The premiums offered to this profile of customer are often lower than those offered to older age groups.
  • Your premium is further reduced when you buy term insurance online directly from the insurance provider. Since processing costs are low online and there is no broker involved, the savings on broker commission are passed to you.
  • A term policy gives you ample breathing room between now and a time when you wish to buy a more expensive endowment plan to increase your spends on life insurance.