In a world full of uncertainties, learn ten compelling reasons why every Gen Z should consider buying a term plan.
By Sandeep Goenka
As Gen Z gets older, navigating the complexities of adulthood, the financial landscape can often seem overwhelming to them. From balancing career growth, managing loans, and planning for future goals, it’s easy to overlook key aspects of financial wellness—like protecting one’s life as a whole. Understanding and investing in a term plan can act as an important pillar for financial security.
In a world full of uncertainties, here are ten compelling reasons why every Gen Z should consider buying a term insurance plan today:
Comprehensive financial protection for dependents
A term plan ensures that in case of unforeseen circumstances, loved ones are fully protected. This coverage can help pay off outstanding debts like home loans or personal loans, while also covering daily living expenses like rent, groceries and utility bills. Beyond immediate needs, a term life insurance policy provides a critical safety net, enabling 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.
Protection against lifestyle-related risks
With an increase in lifestyle-related diseases among young Indians due to factors like stress, sedentary habits and pollution, term life insurance offers crucial financial protection against unexpected health-related losses. Additionally, term insurance plans often provide riders or add-ons such as critical illness coverage, which provides a survival benefit if you are diagnosed with a specified critical illness. This means you receive a lump sum upon diagnosis, help cover medical expenses, and provide financial support during recovery.
Affordability and cost-effectiveness
Buying a term life insurance policy at an early age offers significant benefits 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 more affordable cost, making term life insurance an extremely 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 investment, allowing you to focus entirely on protecting your loved one’s financial well-being.
Coverage for outstanding debts
Many Gen Zs carry significant financial obligations, 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 to family members or co-signers, adding emotional and financial stress to an already difficult time.
A term life insurance plan can help alleviate this concern by covering these outstanding debts, ensuring that loved ones don’t struggle to manage the payments. Whether it is paying off a large loan or settling day-to-day financial obligations, term insurance provides an important safety net, preventing the financial burden from being passed on to family members. This allows them to focus on emotional healing rather than financial stress.
Flexibility in addition to employer-provided insurance
While employer-provided group life insurance is a valuable benefit, it does not provide adequate coverage for individual needs. Additionally, this coverage usually ends when you change jobs. According to a report by KPMG, only 30% of employees feel their group insurance is adequate. Individual term plans can fill this gap, offering additional financial security tailored to individual circumstances.
Easy and convenient purchase process
With the rise of digital platforms and online insurance providers in India, buying term life insurance for Gen Z has become fast and hassle-free. The direct-to-consumer (D2C) online process makes it easy to buy direct products like term insurance, allowing you to. To compare plans, get instant quotes and complete shopping online completely without intermediaries. This convenience makes it easier than ever to secure financial security for loved ones.
Option to increase coverage over time
Some term plans offer incremental cover options that are adjusted 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 acts as a crucial 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 healthcare costs, ensuring that they maintain their standard of living. By providing a death benefit, term insurance alleviates 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 qualify for tax deduction under Section 80C of the Income Tax Act, which allows policyholders to claim a deduction of up to ₹1.5 lakh per annum. Further, 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 removes 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 mental health without worrying about what might happen in their absence.
In conclusion, in a rapidly changing economic landscape, securing a financial future is critical for Indian Gen Zs. Buying a term life insurance plan is a strategic move that offers affordability, flexibility and peace of mind. As they build careers, take on debt and start families, a term plan becomes an essential tool in their financial arsenal, ensuring they are prepared for whatever life throws their way. With the benefits clearly outlined, it’s time for Gen Zs to take this important step toward financial security.