In today’s time, having strong financial planning is no longer a luxury but a necessity. Millennials, in this generation, are redefining the smarter way of financial planning. Leaving life insurance for later phases of life is no longer their preference. Many people are now acknowledging the need for early and informed purchases of essentials like term insurance.
While education loans, career growth, family planning, and life goals often take center stage for millennials, a term insurance plan is a smart and forward-thinking choice that complements these priorities. It is one of the most practical and logical purchases, especially for millennials.
Term insurance should be on the financial planning list for everyone. So, why delay something that has to be done? This guide will provide you with sufficient reasons to purchase term insurance plans that make sense for millennials.
2 Crore Term Insurance Plans: A Smart Choice for Millennials
How much coverage is enough in term insurance plans? This is one question that’s most commonly asked and quite a concern. Answering it, however, is not that straightforward. Every family is different, and so are their financial needs. The first thing to evaluate is the financial needs of your family, both today and in the future. Additionally, you must consider the potential inflation that may impact expenses over time.
Keeping everything in mind, it is always a good choice to choose a high sum assured amount in term insurance plans. In this regard, a 2 crore term insurance is something that many people prefer. Although ₹ 2 crore seems a hefty amount, it may not be if you consider the upcoming inflation and the financial needs of your family for a few years. Read on as we delve further into the details.
Why is a ₹2 Crore Term Plan a Smart Choice?
What seems enough today may not be sufficient tomorrow. That is why it is essential to opt for a higher sum assured amount that can effectively fulfil the purpose of your term plan. Here are some of the reasons why a ₹2 crore term insurance plan makes sense for millennials:
- Income Substitute
For someone who is the sole/primary earning member of the family, ₹2 crore can be used as an income substitute. Depending on the expenses of your family, ₹2 crore can provide financial support for several years. It gives them the time frame to prepare for another income source. Until then, the term’ insurance benefit’ can be used to cover the expenses.
- Beat the Inflation
Inflation is another factor to be considered when planning future expenses. Not only medical expenses, but also general expenses, witness an increase in price. In 2025, the Consumer Price Index (CPI) inflation is expected to be 3.7%, according to the Reserve Bank of India (RBI).
Therefore, having a high sum assured term plan means your family will be better equipped to overcome the impact of inflation.
- Clearing Liabilities
It is obvious for any family to have certain liabilities over the years. It may take the form of loans, debt, overdrafts, etc. If the primary earner passes away, these liabilities become a serious problem. To ensure your family never has to face such a situation, it is crucial to make adequate arrangements at the earliest possible opportunity.
In this context, a ₹2 crore term plan can be beneficial as it can be used to settle liabilities as well as cover the family’s regular expenses.
- Affordable Premiums for Millennials
Millennials are individuals currently in their 20s and 30s. This is one of the ideal age brackets to purchase a life insurance policy. Since people are mostly healthy in their 20s and 30s, they are likely to secure a term insurance plan at lower premiums. Not only this, but purchasing early also means you can get the coverage for a longer tenure.
- Peace of Mind
At the end, a term insurance policy is not just a financial shield for the family, but also gives you peace of mind. When you know that your family’s financial needs will be taken care of even in your absence, it brings huge mental peace to any earning member of the family.
Not only does a term insurance policy serve as a replacement for income, but it also provides a way to leave a lasting legacy for your loved ones.
To Conclude
The future remains unpredictable for everyone, and amid rising inflation and life’s uncertainties, it is wiser to purchase a term plan at the earliest opportunity. When you are young, you can also secure a long-term life insurance policy at affordable premiums. Start planning for your financial stability today with the right term insurance plan.