For most millennials, buying life insurance is not on their list of priorities. However, if they are financially dependent, it is important to have adequate life insurance, even for working adults. What fits at a young age is term life insurance, a pure protection plan that helps secure the financial future of the family in the event of an unfortunate event with the policyholder. Buying life insurance should not be an ad hoc event but one should correctly estimate the insurance need based on one’s goals and then buy insurance plans.
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There are life insurance calculators available on the web that can help one calculate the amount of insurance coverage. But life insurance needs continue to change as one gets older, so a review becomes equally important to prevent underinsurance at every stage of life. There may be goals to achieve such as raising children, buying a house etc. Parag Raja, MD and CEO, Bharti AXA Life Insurance, shares his advice with millennials who may be single or married with or without children on how they can take a life cover in different life stages. fragments:
Working unmarried millennial
For a working unmarried millennial, term life insurance helps keep your parents financially secure. If you have a loan, such as a student loan, the claim money can help your parents pay off the loan if an unfortunate event occurs.
Understanding that you would have just started earning and that there are several aspirations that millennials want to fulfill such as buying a smartphone, taking a trip with friends and more could be a good starting point via a one-year subscription.
It is a subscription where you can subscribe to a term plan for a year at an extremely low premium instead of being tied to a subscription for 20-30 years or longer for a higher premium amount. It provides the much-needed personalization that a millennial’s lifestyle demands these days. The plan is fully customizable to their needs. Moreover, as you move forward in life, you have the option to add or change the nominee to your wife and children as well. Term plans also offer great tax benefits.
Married millennials have many responsibilities: They may have a home loan, car loan, aging parents, or a child on the way. Therefore, term life insurance becomes important to secure your family’s financial future and to cover loans and other obligations.
Couples can opt for a joint life insurance policy that covers both partners under one plan. Moreover, if one wants to protect themselves and grow their wealth for long-term life goals, ULIPs (Unit Linked Insurance Plans) or guaranteed income plans can prove to be an advantageous way.
The selection criteria between an ULIP or a guaranteed income plan depends purely on two things: the return you are looking for and a person’s risk appetite. If you are looking for high market-related returns and have a higher risk appetite, ULIP is the ideal choice. However, if the individual is risk averse, a guaranteed income plan may become the ideal choice.
Millennials with children
For millennials with children, term life insurance is a must if you have young children. In the event that an unfortunate event occurs, the claim money for a term life insurance policy will help the family maintain their lifestyle, cover loans (home, care, etc.) and ensure that money is not a roadblock for the family to fulfill their dreams. accomplish.
Furthermore, you can also invest in ULIPs or guaranteed income plans that provide protection coverage and help you grow your wealth to meet your child’s future needs, such as education or buying a bigger car/house and more.
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