Life Insurance for GenZ

Top 5 Plans in India for Life Insurance for GenZ

*Note: The policyholder for aforementioned table is a 23 year old non-smoking male, with 4 Lakhs salaried annual income, opting for Rs. 1 Cr life cover until 50 years of age

Why is Life Insurance Important for GenZ?

Life insurance is a great way to ensure flow of income among family members when you are no more and to make sure that their lifestyle isn’t hampered. Additionally, life insurance also takes care of wealth creation alongside protection and benefits. Below are some of the reasons why it is important to buy life insurance for millennials or GenZ.

1. Financial Security Towards Family

   Life insurance is one way to make sure that your family is never in financial distress after your death. In this case, term insurance can be availed, as it is the most affordable life insurance and only provides death benefits. 

2. Lower Premium Rates

   As a GenZ, you can avail high life cover at low premium rates. The older you get, the higher your premium rates are going to be. Whole life insurance for millennials is also a great option as it will protect you and your families until the age of 99 or 100 and with very minimal premium rates.

3. Wealth Creation at Young Age

   At the time of buying a life insurance policy at an early age, your money has a long time to grow. Because of this, the maturity or death benefits received at the end of policy term is also more if you invest in your 20s. For example, if you purchase a life insurance policy at 25 years and continue paying premium amounts until 60 years of age, your amount has 35 years to accrue into a retirement corpus. On the contrary, if you purchase the same cover at 40 years, you have only 20 years to grow your funds. So, early investment increases the cash value of your investment in future. 

4. Pay off Debts 

   GenZ individuals may have a debt at a young age, such as credit card debt or student loans, and life insurance can provide a safety net for family members in case they are no longer able to pay off their debt. 

5. Protection to financial dependents 

   GenZ may have dependents at a young age, such as children or elderly parents, and life insurance can provide financial support for these dependents if the person were to pass away unexpectedly. 

6. Tax Benefits

   In addition to the aforementioned advantages, you can also save money on taxes if you have an active life insurance plan, under Sections 80C and 10(10D) of the Indian Income Tax Act.

Types of Life Insurance for GenZ

Out of the number of life insurance options available for GenZ, below mentioned are a few that can be beneficial to them:

1. Term Insurance

   Term insurance is the most affordable and convenient type of life insurance and provides death benefit to the nominee upon the demise of the policyholder. Millennials or GenZ can avail term insurance as they can not only secure their loved ones but also buy the policy at much lower premium rates. 

2. Term Insurance with Return of Premium

   A term insurance with return of premium is a variant of term plan that offers maturity benefits, and also gives you the premium amount back if you outlive the policy term. So, if you buy this variant of term insurance, you can not just pay lower premium rates, but upon maturity, you will also receive maturity benefits. 

3. Whole Life Insurance

   Whole life insurance plan is a life insurance plan that provides you coverage for 99 or 100 years. Therefore, if you buy a whole life plan at an early age, you will be paying lower premiums for the rest of your life and make sure of your loved ones’ security even at old age.

4. Endowment Plan

   An endowment plan is a life insurance plan that offers dual benefits of life cover and wealth creation. Therefore, if you purchase an endowment plan, you can receive guaranteed returns along with life insurance’s protection. 

5. Money Back Policy

   With money back policy, you will receive a percentage of the sum assured at regular intervals during your policy term. However, if you outlive the sum assured, you will receive the remaining portion of the corpus as well as the accrued bonus at the end of policy term.

6. ULIPs

   Unit Linked Insurance Plans (ULIPs) offers financial security for your family members, as well as builds wealth through market-linked returns from systematic investments. With ULIPs, you will get dual benefits of investment and insurance and therefore, enjoy wealth creation from a young age.

What are the common misconceptions that GenZ should avoid when buying life insurance?

The millennials or GenZ have a vast horizon of knowledge regarding several topics, and life insurance is one subject that they should have clarity about. Below mentioned are few of the common misconceptions that you, as GenZ, must avoid:

1. Life Insurance is an extra expense

   Millennials or GenZ are individuals with low or no income source, and thus, people often misguide them into thinking that life insurance is an added expenditure. You must not overestimate the premium costs and opt for life insurance while you’re still young so that you can avail high life cover right from a young age.

2. Life Insurance needn’t be bought at young age

   It is often advised that life insurance must be bought when you’re young because you will have to pay less premium. Moreover, since you may still be pursuing studies while your guardian/parents avail a loan for you, the life insurance can help pay off the loan when you are not alive.

3. Life Insurance isn’t mandatory

   Life Insurance is the most important decision for a person as it involves the security of self and loved ones. It makes sure you are covered when you have an accident or critical illness and when you die, your family/dependents will be taken care of by the life cover.

4. Life Insurance norms are difficult to understand

   With the right set of guidance from the insurer or from trusted sources, learning the fundamentals of insurance is no rocket science. You can easily understand the norms of life insurance and avail a policy that best suits you from Policybazaar with the help of their customer care service.

Wrapping it up!

GenZ knows the way to living a smart ife, and adding life insurance to their portfolio will enrich their financial understanding. Moreover, it will safeguard their families and future needs from unforeseen circumstances. Hence, make the move, but after proper research. You may take help from Policybazaar which compares among 15+ insurance companies and gives a detailed list of the best suited.

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