Millennials, born between 1981 and 1996, are now focusing on establishing careers, planning for the future, and setting long-term financial objectives. Despite being an observer of the technological advancements around them, and enjoying the technological comforts, they’ve also faced challenges like recession and pandemics, prompting them to prioritize savings and financial stability. Consequently, many millennials are opting for term insurance as their preferred savings and investment option. Term insurance has become a key component of their financial planning.
Millennials have many good reasons to pick the best term insurance plan for securing their future. These include:
Financial Security:
Life insurance ensures that the family of the policyholder receives a lump sum amount in the event of an untimely demise. This financial cushion aids them during crises. enabling them to maintain their standard of living.
Wealth Accumulation:
Term insurance coupled with a return on premium feature facilitates millennials in saving and accumulating wealth. The lump sum received upon maturity can be allocated towards fulfilling life aspirations such as higher education, marriage, starting a family, purchasing a home, or securing retirement plans.
Debt Settlement:
The unexpected passing of an individual can leave their family burdened with loans such as mortgages, car loans, credit card debts, and other financial obligations. The death benefit provided by term insurance can alleviate this burden by assisting in the repayment of these debts.
Customized Life Cover:
Life cover can be tailored to meet the customer’s specific needs, life goals, and premium affordability. However, it’s important to opt for a life cover that adequately addresses all financial requirements of the family in the event of the policy holder’s demise.
Flexibility of Premium Payment:
Term insurance grants the flexibility to select the premium payment schedule according to convenience. Options include single payment, limited, or regular pay. With the regular pay option, policyholders can further choose to pay premiums annually, semi-annually, quarterly, or monthly.
Tax Benefits
Term insurance also offers tax advantages, facilitating millennials in charting a secure future for themselves and their families. Premium payments quality for a tax deduction of up to Rs 1.5 lakh per annum under section 80C of the Income Tax Act, 1961, while the death benefit remains tax-free under section 10(10D).
Affordability of Premiums:
Commencing savings and investments early yields substantial benefits, especially since premiums are comparatively lower for young and healthy individuals. Traditional term insurance premiums are notably economical, as these policies solely provide the death benefit in the unfortunate event of the policyholder’s demise.
Mental Peace:
Unlike preceding generations, millennials prioritize mental well-being. Hence, term insurance often emerges as their preferred choice as it alleviates concerns about the financial security of their loved ones.
What Types of Term Plans are Ideal for Millennials?
Millennials have access to various types of term insurance plans in India, including:
Regular Term Plans: These plans offer coverage for a set term in exchange for regular premiums. If the policyholder dies during the term, the nominee receives the benefit; otherwise, no payout.
Term Return of Premium Plans: If the policyholder dies during the term, the benefit is paid out. If they survive, all premiums paid (excluding GST) are returned.
Whole Life Insurance Policy: These plans provide coverage for the entire life of the millennial, up to 99/100 years, instead of a fixed term.
100% Refund of Premium at No Cost Term Plan: Policyholders can exit at a specified point and receive a refund of all premiums paid (excluding GST).
In conclusion, term insurance emerges as the ideal choice for millennials due to its convenience, affordability, and ability to provide financial security for the future. With its flexible nature and straightforward approach, term insurance aligns perfectly with the preferences of millennials. Pure White Investments stands ready to assist millennials in safeguarding their future with tailored term insurance solutions. By prioritizing convenience, affordability, and comfort, Pure White Investments ensures that millennials can confidently protect themselves and their loved ones while paving the way for a secure financial future.