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The most important article that a 25-year-old must read


Taking life insurance might seem like a morbid idea to most people in their 20s. But it can literally be a lifesaver.

People in their 20s have the best time of their lives. They are young, healthy, have a good income and relatively few responsibilities. Such concepts as savings, investments, retirement planning and insurance are not on the horizon of most of them.

Which makes it all the more difficult for most 25-year-olds to accept that they need insurance as much as anybody else. They think, 'I make enough money, why do I need an insurance policy?' If a person in their 20s does take insurance, it is for reasons of tax benefits.

However, taking insurance at this age has many benefits, the primary one being that one can get cheaper policies. Another advantage is that by starting early, the policy holder is able to create a large corpus by the time the plan matures. Yet, some 25-year-olds who run the household may wish to take insurance, but are hampered by the fact that their income is insufficient to pay expensive premiums.

To all 25-year-olds, we say: drop everything and take a term plan. This is why:

No worries about expensive premiums. Term plans are high sum assured pure life policies that have very affordable premium payments. The important point to note here is that the premiums are low. This helps a person in his 20s invest in a plan that gives excellent life coverage till the time that he can afford to buy a more expensive life insurance policy.

It is easy to buy term plans. All reputed insurance providers have interactive company websites that facilitate the purchase and renewal of insurance plans. Since the premiums for term plans are quite low, many insurers allow the policy to be purchased online without a medical check-up. Others will deem the policy sold only on completing the medical check-up. It is possible to research and buy the best term insurance policies sitting at home or during one's lunch hour.

Buying term plans early results in cheaper premiums. Insurance providers are quite pleased to offer lower premiums to individuals in their 20s who purchase the policy online. Also, since the operational costs of processing the policy online are lower, term plans purchased online are cheaper.

Your dependents will be cared for in your absence. You may not be married and have a family at age 25, but you will certainly have parents and younger siblings who might be dependent on your income. What happens to them if you are absent in the future? Are they doomed to financial instability? The answer is 'No' if you take a term plan. The high sum assured can help them lead comfortable lives even in your absence.