I have just graduated from college and have joined my first job. I have been consuming a lot of content on financial planning and wanted to understand if I should buy life insurance at this age without any dependents. Does it make sense for me to buy life insurance policy at the age of 24? If yes, what kind of plan should I consider?
Jaiesh
Investing in life insurance in your 20s is a prudent financial decision. As you begin your career, you’ll set various goals — some short-term, like travel; medium-term, like buying a car; and long-term, such as purchasing a house or starting a family. Life insurance is ideally suited for securing medium- and long-term goals, providing a financial safety net as you work towards these milestones.
Regardless of your current life stage, your insurance portfolio should be underpinned by term life insurance that secures your family financially if something were to happen to you. While you may not have dependents today, there may come a time when your parents retire, or you start a family and have dependents. Starting early allows you to lock in lower premiums and secure longer coverage, setting the stage for a financially-secure future. As your life goals change — through marriage, buying property, or expanding your family — you can revisit your coverage to match your evolving financial goals.
Now that you understand the importance of a term insurance plan, it’s also worth noting that there are other life insurance options you can consider alongside it. Choosing the right life insurance plan also depends on your risk appetite and life goals. If you’re comfortable with higher risks and market fluctuations, consider unit-linked insurance plans (ULIPs) that offer potential growth through market-linked investments. If you prefer guaranteed returns and more stability, traditional plans are your go-to. Your insurance strategy should align with your financial aspirations and risk tolerance, ensuring it evolves with you. Stay informed and make life insurance a cornerstone of your financial journey, ensuring it supports your life goals.
The writer is Sr. EVP and Head of Products, Bajaj Allianz Life Insurance
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