When you hear the word term insurance, what do you think of? Most people imagine a middle aged man with children, maybe someone in his 40s or 50s, worrying about how to protect his family in case something happens to him.
But what if I told you that term insurance
is not just for married people? In fact, buying term insurance early in life when you're young and healthy is one of the smartest financial decisions you can make.
In this article, we’ll break down everything you need to know about term insurance in simple English. Whether you are 22, 25, or 30 years old, this article will help you understand:
- What is term insurance?
- Why young people need it
- Common myths about term insurance
- Life examples
- How to choose the right term insurance plan
Let’s start by understanding the basics.
What is Term Insurance?
Term insurance is a type of life insurance that provides financial protection to your family if something happens to you during the policy period.
Here’s how it works:
- You pay a small amount (called a premium) every year or month.
- In return, the insurance company promises to pay a large amount of money (called a sum assured, like ₹1 crore) to your family if you pass away during the term of the policy.
That’s it. It’s simple, pure life cover no savings, no investments, just protection.
Why Should Young People Buy Term Insurance?
Now, you might be thinking:
"I’m only 25. I’m healthy. I don’t have a wife or children. Why should I bother?"
Let’s look at real and practical reasons why buying term insurance early is a great move:
1. Premiums Are Very Low When You’re Young
The biggest benefit of buying term insurance early is the low premium. Insurance companies calculate your premium based on age and health.
For example:
- A 25-year-old non-smoker can get a ₹1 crore term plan for about ₹500/month.
- The same plan could cost over ₹1,200/month if you buy it at 35.
That’s more than double!
And here's the best part: Once you buy the plan, the premium stays fixed for the entire policy term. So even if your health changes later, you won’t pay extra.
2. You May Have Financial Dependents Without Realising It
You might not have a spouse or kids yet, but do your parents depend on you? Have you co-signed any loans with family? Are you planning to take a home loan or car loan soon?
If something happens to you, those responsibilities don’t disappear. Your parents or family will have to deal with those payments. Term insurance can prevent that burden.
3. It Protects Your Future Family
You might be single today, but what about 5 or 10 years down the line? You might get married, have children, or take on bigger responsibilities.
Buying term insurance now ensures your future family is protected without paying high premiums later.
4. It Helps With Financial Planning
Getting a term plan early teaches you financial discipline. It’s a sign you are taking control of your financial future. It also gives you peace of mind, knowing your loved ones are protected.
5. Medical Conditions Can Come Anytime
Nobody can predict the future. What if you develop a health issue in your 30s that makes it hard or impossible to get insurance later?
Buying early ensures you are covered while you are healthy.
Common Myths About Term Insurance (and the Truth)
Let’s bust some common myths that stop young Indians from buying term insurance:
❌ Myth #1: Term insurance is only for married people
✔️ Truth: Term insurance is for anyone who wants to protect their family or repay loans in case of sudden death. Marriage is not a requirement.
❌ Myth #2: I can buy it later when I’m older
✔️ Truth: The longer you wait, the higher the premium. Also, health conditions can develop as you age, which can lead to rejection.
❌ Myth #3: Term insurance is a waste of money since I don’t get it back
✔️ Truth: Term insurance is not an investment, it’s protection. Just like you pay for health insurance or car insurance. You hope you never use it, but it's there when needed.
❌ Myth #4: I don’t have a big income, so I don’t need insurance yet
✔️ Truth: The lower your income, the more important it is to protect it. And since the premium is small, you can always start with a basic plan and upgrade later.
Life Scenarios That Will Make You Think
Let’s look at a few relatable situations:
👤 Ramesh, 26, Software Engineer
Ramesh just got his first job in Bangalore. His father recently retired, and Ramesh pays part of the home loan EMI. If something happens to him, his retired father will be stuck with a big debt.
Term insurance of ₹1 crore would cost him just ₹500/month. It’s a small price to keep his family financially secure.
👤 Priya, 29, Marketing Professional
Priya is single, independent, and plans to adopt a child in the next few years. She took a personal loan for her mother’s medical treatment. A term insurance policy can ensure her family isn’t left in a tough spot.
👤 Anand, 24, MBA Student
Anand is in the final year of his MBA. He took an education loan of ₹20 lakhs. If something happens to him before he repays it, his co-applicant (his father) will have to bear the burden.
A simple term plan can take care of that risk.
How to Choose the Right Term Insurance Plan
If you're convinced you need a term plan (and you should be!), here are some easy steps to choose the right one:
1. Decide How Much Coverage You Need
A general rule: coverage should be 10-20 times your annual income.
If you earn ₹600,000/year, a cover of ₹1 crore is a good starting point.
2. Choose the Right Policy Term
Your policy should ideally cover you until age 60 or 65 when most people retire. So if you’re 25 now, a 35-40 year term is a good idea.
3. Compare Different Insurance Companies
Look at:
- Claim Settlement Ratio (higher is better)
- Premium amount
- Features and riders (like accidental death cover, critical illness)
4. Disclose Everything Honestly
When filling the form, do not hide details like smoking, drinking, or medical history. Hiding information can lead to claim rejection later.
Mistakes to Avoid
-
Buying insurance from friends or relatives without research
-
Choosing low cover just to save premium
-
Not reviewing the policy after major life changes
Bonus Tip: Term Insurance With Return of Premium (TROP)
Some companies offer a term plan where you get your premium back if you survive the policy term. Sounds good, right?
But be careful: these plans are more expensive. A regular term plan + a separate investment (like mutual funds or PPF) usually gives better returns.
Final Thoughts: Take Action Now
Being young is not a reason to delay buying term insurance. In fact, it’s the best time to get it.
You get the lowest premium, better eligibility, and long-term peace of mind.
So whether you're single, just starting your career, or planning to settle down in a few years, term insurance should be part of your financial toolkit.
Protect your dreams, your goals, and your family’s future because life is unpredictable, but planning isn’t.
Want Help Choosing the Right Term Plan?
Drop your questions in the comments or reach out to me for a quick one-on-one consultation. Let’s secure your future smartly and simply.
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