Every young adult has various aspirations in life. As a young adult, your primary focus at a young age can be your career. Since you might work towards building a steady career when you are young, you might overlook the benefits of purchasing a term policy early. Before you learn the benefits of purchasing a term plan in your 20s, let’s first understand what term insurance is in detail:
A term policy can be a subject of life insurance that can work for the financial well-being of your loved ones. A term plan can typically offer you with two main benefits that can help you and your family to sustain financially:
- Death benefits
A term plan can offer a monetary payout called death benefits in your absence to your nominees. The death benefits can allow your family members to maintain their current standard of living after your demise. As the beneficiary, your family can decide whether they wish to obtain the payout monthly or annually.
- Survival benefits
Today, many insurance companies have availed term plans with survival benefits. When you purchase a term plan with the survival benefit option, your insurer can return the whole premium at the maturity period. With the maturity benefit, you can meet your post-retirement needs as well as manage the financial requirements of your dependants after retirement.
A term life insurance can provide you with death benefits as well as survival benefits at every step of your life. However, purchasing a term plan at a young age can offer you with relatively high benefits along with the primary term insurance benefits. Ideally, you can purchase term life insurance between the age brackets of 18-61 years. However, the right time to buy term insurance can be in your 20s. Let’s go through the top four reasons that can help you understand why a term policy should be bought when you are young:
- Affordability
As a young adult, your primary focus in your 20s can be to build a strong career background. At a young age, your income might be low. Hence, you might assume that you would not be able to afford the term insurance premium with a low income. However, a term insurance premium can be relatively less at a young age due to your physically fit health condition. Since the premium can be minimal, you should not hesitate to buy term insurance when you are young.
- Security
While many of you might have fewer financial responsibilities at a young age, the rest of you can have dependants within your family when you are young due to unfortunate events. For instance, if you have a single parent, you might be willing to support your family financially after you start earning. However, if anything happens to you, your parent might bear the financial responsibility alone. Therefore, you should buy term insurance to safeguard your loved ones even in you absence.
- Convertibility
A term plan in your 20s can be the right choice since the term insurance premium would be low. The premiums can be affordable for you since you might have started out your career. As your career progresses further, your income can rise. When your income rises, you can be able to pay a relatively high premium rate. Hence, you can convert your term insurance to an endowment policy in your late 30s.
As highlighted above, the ideal time to buy term insurance can be when you are at a young age. The benefits can be relatively more at a young age, and you can make the most of term insurance plan to secure your family. Typically, the affordability can make the term policy, a viable option of purchase at a young age. However, make sure that you are not lured by the low premium rate. Compare multiple plans using a term insurance calculator. Select a reputable insurance provider and choose the right term plan based on your financial needs to get your family’s life goals done.