According to investment experts, investing in insurance products at an early age can result in significantly huge benefits over the long term. As the age of the insured member is a deciding factor of the insurance premium, low premium rates for life insurance and health insurance is one of the perks of getting an insurance plan in your 20s.
Another benefit of investing young is the accumulation of a larger corpus over the years compared to investing at a later stage in your life. Also, when you have an insurance cover to protect you against unexpected financial losses, you need not worry about making your monthly car loan and personal loan EMI payments. Now that we know the three benefits of investing in insurance at a young age, let’s find out what are the three types of insurance needs that one faces in their 20s.
Life Insurance
Although most people in their 20s may not have high incomes or wealth to speak of, investing in an insurance policy can protect them against unexpected financial setbacks. Protect yourself against unexpected risks by getting a life insurance policy. The benefit of purchasing a term insurance plan at a young age is the low premium rates. For instance, if you purchase a term insurance policy at the age of 25, the premium will be Rs 7,000 for a period of 30 years, whereas the same policy bought at the age of 30 will have a premium of Rs 9,000. Therefore, it is better to purchase a life insurance policy at a young age.
The same applies to health insurance as well. The insurance coverage of a person can be enhanced by adding a rider plan, like a critical illness cover or a personal accident cover to the base policy for an additional premium.
Health Insurance
One of the popular myths about young people is that they are hale and hearty, and not vulnerable to diseases or illnesses. Unfortunately, the youth of today lead a sedentary lifestyle which has led to an increase in the number of lifestyle diseases. Personal accidents can occur any time at any place. No one is immune to accidents. What’s more, the cost of healthcare is steadily increasing with medical inflation every year. With the right health insurance policy, a young man or woman can be adequately covered for years for the treatment of any disease or accidental injury. Furthermore, you can also enhance your health insurance cover by attaching a rider plan like a critical illness cover, hospital cash benefit cover or a maternity cover to the base policy.
When you are young, you may not require constant healthcare treatments as much as someone in their old age. Therefore, you can accumulate the No-Claim Bonus (NCB) offered by some insurance companies over the policy years during which you haven’t made any health insurance claims. The accumulated NCB can be used to get a better deal on your future insurance premium rates at the time of policy renewal.
Motor Insurance
Those who are in their 20s feel the urge to own a car or a bike to get to places without having to patiently wait for the public transportation or spending on expensive taxi rides. In India, the legal driving age is 18 years. As much as it is important to get your Driving Licence, it is also equally important to have a valid motor insurance policy for your vehicle. The Motor Vehicles Act, 1988 states that a third-party motor insurance policy is a must for all vehicles on public spaces in the country.
The premium rates for your four-wheeler and two-wheeler insurance policies depend on the age, make and model, geographical location, and the engine capacity of the vehicle. In the case of a four-wheeler insurance, opt for a comprehensive car insurance policy for coverage for third-party damages as well as damages to the vehicle and the policyholder.
Young people working in high-risk jobs, such as construction, factories, and any work involving heavy machinery, should consider getting a personal accident insurance cover. If an employee is laid off work due to an accidental disability or dismemberment, they can get temporary income through the personal accident insurance cover.
In conclusion, these three types of insurance products can ensure your security in the long-term. So, how can you get the best insurance policy to suit your needs? To get the best of anything, you have to do some research. Nowadays, product information is available online to anyone with a good internet connection and a computer or a smartphone. Compare various insurance policies across the top insurance companies in the country and choose one that best suits your needs. Furthermore, with a few clicks of your mouse, you can purchase a new insurance plan online or renew the existing insurance policy from the comfort of your home or office.
(This post has been contributed by Bankbazaar.com)
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