Why Young Indians Are Quietly Locking in Term Insurance Early?

There’s a quiet revolution happening in how young Indians think about their future. In their 20s and 30s, a phase often marked by chasing dreams and building careers, they’re making financial decisions that might surprise many.

It’s not about flashy investments or quick returns. This is a choice driven by practicality and long-term security. Without much fanfare, they’re locking in term insurance early.

Let us explore the benefits that have been driving this thoughtful shift.

Simplest Form of Insurance

Term insurance is one of the easiest-to-understand financial products available today. It provides a pure risk cover—meaning you pay regular premiums, and in return, your family gets a fixed payout if something unfortunate happens to you during the policy term. There’s no investment or savings component, which makes it straightforward and transparent.

Unlike more complex insurance plans that mix investment and life cover, term insurance focuses solely on offering financial security. It’s especially convenient in today’s digital age—you can research, compare and buy a policy online in just a few steps, often without even needing to meet an agent or visit an office.

Lower Premiums

One of the strongest reasons to buy term life insurance plans early is the affordability of premiums. The younger you are, the healthier you’re presumed to be and the less you pay. For example, if you’re in your 20s and purchase a policy with ₹1 crore coverage, your annual premium might be around ₹500-₹1,000 per month.

However, if you wait until your 40s, the premium for the same coverage could more than double, as health risks increase with age. It’s like locking in a great deal when the prices are at their lowest—it makes financial sense and saves you money in the long run.

Significant Sum Assured

Starting early means you can get a higher coverage amount for a lower cost. For example, it’s now common and affordable for young people to buy a term insurance plan that offers ₹1 crore or more in coverage. This high coverage amount works like a safety net for your family, helping them stay financially secure if something happens to you.

Whether it’s replacing the income you would have earned, covering your child’s education, paying for medical expenses or clearing loans, the money your family receives can take care of their financial needs and reduce their stress during tough times.

Longer Coverage Period

Purchasing term insurance at a young age gives you access to a longer coverage period. Let’s say you buy a policy in your mid-20s. Now, you can opt for a term of 30-40 years, extending coverage well into your 50s or 60s. This is particularly useful when your responsibilities—such as paying off a home loan or supporting your child’s education—span decades.

By locking in a long coverage period early, you’re ensuring that your financial commitments are handled, regardless of when the policy is utilised.

Added Protection at Nominal Extra Cost

Term insurance plans let you boost your coverage by adding extra features, called riders, for a small additional cost. They are optional and can be chosen based on what you need. Some common riders include:

· Critical Illness Cover: Gives you a lump sum payout if you’re diagnosed with a serious illness like cancer or a heart problem.

· Accidental Death Benefit: Increases the payout amount if you pass away due to an accident.

· Disability Cover: Provides financial support if you’re unable to work because of a disability caused by an accident or illness.

By adding these riders, you can prepare for specific situations without buying separate policies. It’s an easy way to make your term insurance more flexible and suited to your life.

Tax Benefits

Term insurance policies come with dual tax advantages under the Income Tax Act of India, 1961.

1. Section 80C: Premiums paid toward the policy are eligible for tax deductions of up to ₹1.5 lakh annually.

2. Section 10(10D): The payout received by your nominee in case of a claim is entirely tax-free, ensuring your family gets the full amount without deductions.

This makes term insurance a tool for financial security—an effective way to minimise your tax burden during your earning years.

Takeaway

Securing your family’s future with a term insurance plan is smart, but selecting the correct policy requires careful planning. A term insurance plan calculator helps you find the right balance by showing you the premium based on your coverage and term requirements.

Here’s a tip: Don’t just pick a random amount for coverage. Think about how much money your family would need for things like daily expenses, loans and future plans like education or a house. Using the calculator can help you choose a policy that fits your budget while giving your family the right level of support. Take your time and plan well—it’s worth it.

(No Hans India Journalist was involved in creation of this content)