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Generation Z is young, smart, and promising, but sometimes, they fail to determine the potential financial risks. So, to safeguard their future, life insurance is a wise choice, and something that will also protect their families in unforeseen times. In this article, we will understand the importance of life insurance for Gen Z and check the best plans for them.
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~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
| Insurer | Claim Settlement Ratio | Entry Age | Maximum Maturity Age | Maximum Sum Assured | |
| TATA AIA Sampoorna Raksha Supreme Instaprotect | 98.53% | 10-65 Years | 100 Years | No Limit | |
| Bajaj Allianz Life eTouch | 99.02% | 18-45 Years | 99 Years | 10 Crores | |
| PNB MetLife Mera Term Plan Plus | 97.33% | 18-60 Years | 75 Years | No Limit | |
| Kotak Life e-Term | 98.82% | 18-65 Years | 75 Years | No Limit | |
| SBI Life eShield Next | 97.05% | 18-65 Years | 100 Years | No Limit |
*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
Term Plans
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.
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.
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.
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.
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.
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.
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.
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Out of the number of life insurance options available for GenZ, below mentioned are a few that can be beneficial to them:
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.
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.
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.
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.
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.
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.
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:
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.
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.
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.
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.
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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+All savings provided by insurers as per IRDAI approved insurance plan. Standard T&C apply.
