Wednesday, 13 August 2025

Life Insurance in Your 20s: Smart, Simple, Strategic

August 12 is celebrated as International Youth Day with a lot of energy, ambition and possibility. In all this enthusiasm, have we ever considered life insurance as part of this youth agenda? Probably not, because it’s not the most common and preferred party conversation.

We have often heard this from everyone that when we are in our 20s, we have the option of taking risks – whether its switching jobs or moving cities or even starting a side hustle, right? Ironically, we miss talking about how we are going to manage those risks, especially financially.

Most of us have grown up with the thought process that life insurance is something we look at may be when we are in our 40s and 50s when we have growing children or a mortgage or probably some health concerns. That’s where we are wrong. Thinking about buying life insurance at an early age is not just about protection, it’s a smart financial move.

Let’s break the stereotype

Life insurance is not about the typical thought process of “when I die, my family will get the money”; it’s about securing yourself and building wealth smartly.

There are several ULIPs and Whole Life plans which are beyond the standard offering of a payout in case of any unfortunate incidence. They help you grow your money slowly over time, like a disciplined investment, especially when you start young.

Wondering why? We will tell you.

The premiums are lower

Insurance gets more expensive as you age. When you buy young, your premiums are lesser, and they continue to remain the same.

You are much healthier

This is to your advantage as it means no exclusions, no waiting periods, and guaranteed renewability for the future, even if your health changes.

Your money grows with you

The earlier you start, the more time your money gets to grow. While it is similar to SIPs and stocks, life insurance has a dual benefit as it provides security for life as well as financial wellness.

Tax benefits

Premiums qualify for 80C deductions. And maturity amounts can be tax-free under certain conditions (Section 10(10D).

To make it easier for you, we have a bundle of offerings for your every need. Explore here - link

Let’s help you understand the different options

Term Insurance	Whole Life	ULIPs
Good starting point Provides pure protection Lower premiums	More expensive but offers lifetime cover along with cash value	Strikes the right balance between life security and market-linked growth There is flexibility to switch funds at every milestone

These can be layered with Riders which are optional add-ons, or we could say an extra cushion for life’s curveballs such as critical illness cover, accidental death, or waiver of premium.

Be smart

This International Youth Day, while you are setting goals, making plans, and figuring out your life, take a moment to think long-term. Add life insurance in your scheme of things. It’s not about expecting the worst but preparing for the best with stability, freedom and choices that grow with you.

So, be smart, start small; but most importantly, start now, because the future-you will be glad you did.

FAQs

1. I’m in my 20s with no dependents. Do I really need life insurance?

Yes! Life insurance isn’t just for people with families. It’s a smart way to lock in low premiums while you’re young and healthy, build long-term financial discipline, and secure your future self against unexpected life events.

2. What’s the difference between Term Insurance, Whole Life Insurance, and ULIPs?

Term Insurance: Offers pure protection for a set period. Lowest premiums.
Whole Life Insurance: Covers you for your entire life and builds a cash value over time.
ULIPs (Unit Linked Insurance Plans): A combo of life cover and market-linked investment with flexibility to switch funds.

3. Is life insurance also an investment option?

Yes, certain plans like ULIPs and Whole Life policies have an investment component that helps grow your wealth over time. It’s like combining security with smart money habits.

4. What are the tax benefits?

Premiums paid for life insurance are eligible for deduction under Section 80C (up to ₹1.5 lakh per year). Also, maturity proceeds can be tax-free under Section 10(10D), subject to conditions.

5. What are Riders, and should I consider them?

Riders are optional add-ons that give you extra protection. Popular ones include:

Critical Illness Rider
Accidental Death Benefit
Waiver of Premium (in case of disability)
They’re like safety nets for life’s curveballs and are worth considering for better coverage.

6. Can I switch or upgrade my plan later?

ULIPs offer fund-switching flexibility. For other types, you can’t “upgrade” per se, but you can always buy additional coverage or add Riders. Starting early gives you the freedom to layer protection as your life evolves.