Why Term Insurance Plans Are a Smart Choice for Young Professionals

Term insurance plans are ideal options for young professionals, even more these days with all the stress and strain of daily life. In fact, these policies can be financial safety nets for their families, considering the unpredictability of life itself and the growing incidence of lifestyle ailments among younger people in India. 

Term insurance should be the first addition to any investment portfolio, followed by health insurance. Only then should young professionals opt for other investment options to earn steady returns. Here’s looking at why term plans are smart choices for young professionals. 

Why Young Professionals Should Purchase Term Insurance Plans 


A Term insurance plan is the best choice for young professionals due to the following reasons. 

  • Full Financial Security – Buying a term plan ensures that the young professional’s loved ones are completely secure in case of any unfortunate incident within the policy period. The payout from the policy will help parents, siblings, and other family members live dignified lives in terms of their financial situation. 


  • Higher Coverage and Premium Savings– One of the biggest advantages of buying a term insurance plan early in life is the comparatively lower premium for a higher amount of coverage. This is because younger people are less vulnerable to major ailments, and this is why insurance companies are more willing to offer higher coverage at a reasonable premium that stays locked in for the whole policy tenure. It helps people get more savings in the future. This certainly works out to a staggering amount once one works out how much that same coverage would cost while buying a policy in the late 30s, 40s, or 50s. 


  • Tax Deductions– Premiums paid for term insurance plans are tax-deductible under Section 80C of the Income Tax Act up to Rs. 1,50,000. This also works as a major source of tax savings for young professionals, particularly when they have just started their careers and do not have home loans or other investments yet. 


  • Options to Expand Coverage– Young professionals can gradually opt for add-ons or riders to scale up coverage in several categories, i.e. critical illness/terminal illness, hospital care, surgical care, accidental death or disability, and more. These riders require nominal premiums which are tax-deductible under Section 80D as well. Another benefit is that young professionals can also increase their coverage at various stages of life for complete protection- after marriage, childbirth, etc. 


  • Fiscal Responsibility– By committing to a term insurance plan early in life, young professionals learn much-needed financial responsibility and discipline. This will be beneficial later in life and be a foundation to gradually build up an investment and financial protection portfolio while accumulating long-term savings alongside. 


Hence, a term insurance plan is a major boon to any young professional looking to financially secure his/her parents and loved ones in the event of any unfortunate mishap down the line. At the same time, other advantages include flexible coverage increases, add-ons and riders to expand the scope of coverage, reasonable premiums for substantially higher overage, and tax deductions. It is a win-win addition to any portfolio without a doubt. 

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