Millennials have a different take on the insurance and investment landscape. Also, the spending habits of individuals have changed over the years. Although saving habits have widely changed owing to the generation’s appeal towards the ‘you only live once’ (YOLO) philosophy, the outlook towards insurance and investment has widely improved.
In India, life insurance penetration has improved over the years. Let us now understand what is life insurance.
As the name suggests, life insurance is financial coverage for one’s life offered by the insurance provider against a fixed premium that the insured pays for the predetermined tenure. Life insurance is nothing but a contract between the insurer and the insured. The insured’s beneficiaries receive an assured sum in case of their demise in exchange for the premiums paid by the insured until they are alive. This policy provides your family or the beneficiaries with disbursals of payments at regular terms allowing you to secure their future in case of your absence owing to unforeseen circumstances.
What life insurance does differently from term insurance is that term insurance provides you coverage for your life for a certain period of time. The coverage here is for the whole life. As there are different types of life insurance, each individual can opt for a feasible policy based on their financial needs.
Here is a list of various other types of life insurance policies:
- Term insurance policies: This policy covers your life for a specific term, and if you face an unfortunate demise, your beneficiaries receive the benefits of the policy to help them lead and maintain their current level of lifestyle. However, you will not receive any benefit if you outlive the policy.
- Whole Life insurance policies: These policies are similar to term insurance policies; however, the coverage is extended up to 100 years of age.
- Endowment policies: This is different from term and whole life insurance policies. In the case of an endowment policy, you get the sum assured upon maturity of the policy, or your beneficiaries receive the maturity sum basis the terms laid down by the policy.
- Retirement plans: These plans are created to provide you with regular payments upon retirement to keep a steady income stream. This is highly beneficial for a comfortable retirement life.
- Money-back policies: As the name suggests, the policy offers varied benefits to the policyholder upon surviving until the policy’s maturity date.
Essentially, this is what is life insurance. You can choose policies that may suit the strength of your pocket, your needs, and your family’s needs and even keep in mind the term/whole life insurance wherein your policy benefits their lives in your absence.
Before getting insured, understand what life insurance is and determine which suits your needs. Making an informed decision helps save money and get the most out of these policies.
Millennials have the benefit of time on their side. As they are younger, they are in a position to get affordable premiums. They can determine to purchase policies and even get tax benefits.