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In a world full of uncertainty, learn ten compelling reasons why every Gen Z should consider buying a term plan.
Buying a term life insurance policy at an early age offers the significant benefit of locking in lower premiums. (Representative image)
By Sandeep Goenka
As Gen Zs move through the complexities of adulthood, the financial landscape can often feel overwhelming. Overlooking important aspects of financial well-being, starting with career development, debt management, and planning for future goals Simple—like purely protecting one’s life. Understanding and investing in a term plan can serve as an important pillar for financial security.
In a world full of uncertainty, here are ten compelling reasons why every Gen Z should consider buying a term today. Insurance plan:
Comprehensive financial protection for dependents
Oh Term plan Ensures that in case of unforeseen circumstances, loved ones are fully protected. This coverage can help pay off outstanding debts such as home loans or personal loans, while also covering day-to-day expenses such as rent, groceries, and utility bills. Beyond immediate needs, a term life insurance policy provides an important safety net, allowing a family to maintain their standard of living and pursue long-term financial goals, such as children’s education or future investments, without financial stress. Enables
Protection against lifestyle risks
With lifestyle-related diseases on the rise among young Indians due to factors like stress, sedentary habits and pollution, term life insurance offers significant financial protection against unexpected health-related deaths. Additionally, term insurance plans often provide riders or add-ons such as critical illness coverage, which offer a survival benefit if you are diagnosed with a certain critical illness. This means you will get a lump sum payment after diagnosis, help cover medical expenses and provide financial support during recovery.
Affordability and cost effectiveness
Buying a term life insurance policy at a young age offers the significant benefit of locking in lower premiums. Since premiums are primarily determined by age and health, Gen Z can secure these reduced rates, which remain fixed throughout the policy term. Starting early allows you to get the best coverage at a much cheaper price, making term life insurance a very cost-effective way to protect your financial future.
Additionally, as a pure protection plan without an investment component, term insurance is generally more affordable than plans that combine protection with investments, leaving you to only protect your loved one’s financial well-being. allows to focus on securing
Coverage for outstanding debts
Many Gen Zs carry significant financial responsibilities, such as student loans, credit card debt, and home loans, which can place a heavy burden on the financial future of their financial dependents. In the event of an untimely death, these debts don’t just disappear — they often fall on family members or co-signers, who add emotional and financial strain during an already difficult time.
A term life insurance plan can help alleviate this concern by covering these outstanding debts, ensuring that loved ones do not face difficulties in managing the payments. Whether it’s paying off large debts or settling day-to-day financial obligations, term insurance provides an important safety net, preventing the financial burden from shifting to family members. This allows them to focus on emotional healing rather than financial stress.
Flexibility beyond employer-provided insurance
Although employer-provided group life insurance is a valuable benefit, it may not provide sufficient coverage for individual needs. Moreover, this coverage usually ends when you change jobs. According to a KPMG report, only 30% of employees feel their group insurance is adequate. A personal term plan can fill this gap, offering additional financial protection tailored to individual circumstances.
Simple and easy purchase process
With the rise of digital platforms and online insurance providers in India, buying term life insurance for Gen Z has become quick and hassle-free. The direct-to-consumer (D2C) online process makes it easy to buy a straightforward product like term insurance, allowing you to To compare plans, get instant quotes, and complete shopping online completely without intermediaries. This facility makes it easier than ever to get financial security for your loved ones.
Option to increase coverage over time
Some term plans provide incremental cover options that adjust for inflation, ensuring that the sum assured increases over time. This feature is especially beneficial in today’s economic landscape, where the cost of living can rise significantly due to inflationary pressures. By choosing a plan with this option, policyholders can ensure that their coverage keeps pace with rising costs, protecting their family’s financial security in the long run.
Income replacement
If you are the primary contributor to the household income, term insurance serves as an important income replacement for dependents in case of untimely death. This financial assistance helps the family manage ongoing expenses, such as rent or mortgage payments, utility bills, education fees, and health care costs, ensuring that they maintain their standard of living. keep By providing a death benefit, term insurance addresses concerns about financial instability, allowing loved ones to focus on adjusting to their new circumstances without the added stress of immediate financial hardship.
Term insurance tax benefit
Term life insurance premiums are eligible for tax deductions under Section 80C of the Income Tax Act, which allows policyholders to claim deductions of up to ₹1.5 lakh per annum. Additionally, the death benefit to the beneficiaries is generally tax-free under Section 10(10D). This dual benefit makes term plans an attractive financial investment for Gen Z.
Peace of mind
Unlike previous generations, Gen Z places a high priority on mental health and wellness. As a result, term insurance has become a popular choice for them, as it reduces the stress and anxiety surrounding the potential financial impact of an untimely death on their loved ones. This proactive approach to securing their family’s future allows Gen Z to focus on their own mental health without worrying about what might happen in their absence.
To conclude, in a rapidly changing economic scenario, securing a financial future for Indian Gen Zs is crucial. Buying a term life insurance plan is a strategic move that offers affordability, flexibility and peace of mind. As they build careers, take out loans, and start families, a term plan becomes an essential tool in their financial arsenal, ensuring they’re prepared for whatever life throws their way. With the benefits clearly defined, now is the time for Gen Zs to take this important step toward financial security.
The author is Chief Executive Officer, ACKO Life Insurance. The views expressed are personal.
Disclaimer: The views and investment tips of the experts in this News18.com report are their own and not those of the website or its management. Readers are advised to consult qualified experts before making any investment decision.