Term Insurance for Young Salaried Professionals

As a young and dynamic professional, you're embarking on an exciting journey in your career. While you focus on achieving your goals, it's essential to also think about securing the financial future of your loved ones.

Term insurance is a smart and creative solution for young salaried professionals like yourself, offering a strong safety net that can shield them against life's uncertainties. With its cost-effective and simple nature, term insurance provides peace of mind, ensuring your family can meet their life goals and maintain their lifestyle.

Buying term insurance for a salaried individual requires careful consideration and attention to detail. It's about finding the perfect balance between protection and affordability, ensuring that your loved ones are securely supported in case of any unexpected events.

In this article, we’ll discuss how you, as a young salaried professional, can go about buying term life insurance policies for adults.

A term insurance plan is a smart solution to safeguard your family's financial future. It offers a simple yet effective way to protect your loved ones. In the unfortunate event of your passing while the policy is active, the insurance company will provide a sum of money, known as the 'sum assured', to your family.

This sum of money acts as a replacement for your income, ensuring that your family's financial needs are met without them having to compromise on their lifestyle and dreams. Your family will receive this money according to the claim payout option you selected when purchasing the policy.

Please note term insurance is pure risk coverage, which means it will offer no benefits if you outlive the policy term.

Here’s why term insurance is significant for young salaried professionals like yourself -

• Protecting Your Loved Ones
  As a young professional, you may have dependents who rely on you for financial support, like your retired parents or younger siblings. With term insurance, you can provide a safety net for your loved ones in case of the unexpected. By securing their financial future, you can ensure that they can continue to lead a comfortable life and pursue their dreams, even if you're no longer there to support them.


• Unlock Financial Security At Affordable Prices
  Investing in term insurance at a young age brings with it the smart advantage of affordability. By seizing this opportunity, you can enjoy lower premiums while you are in your prime, both in terms of age and health. This means that young professionals can effortlessly secure extensive coverage without breaking the bank.


• Income Replacement
  As a young professional, as you climb the ladder of success, your earnings often soar. To safeguard the financial well-being of your loved ones, term insurance often acts as a smart and creative solution for income replacement. This invaluable tool ensures that even in the absence of the primary earner, your dependents' financial needs are met. With the flexibility to customise the policy amount, it can cover several years of income, providing a sustainable lifestyle for the family.


• Manage Your Financial Liabilities
  As a young professional, you may find yourself burdened with financial liabilities like student loans, personal loans, credit card debts, etc. But fret not! There's a smart solution to prevent these burdens from falling on your loved ones in case of an unexpected tragedy. Consider term insurance to cover these liabilities and ensure your family is protected.


• Long-Term Financial Planning
  When it comes to long-term financial planning, term insurance is a key player. It's not just about meeting immediate needs; it's about building a strong foundation for your family's financial security. As a young professional, you can leverage term insurance to provide stability to your loved ones for years to come.


• Secure The Future
  As you embark on your journey towards achieving your life goals, such as buying a home, starting a family, or pursuing advanced education, term insurance becomes your reliable safety net. It provides a financial cushion that ensures your loved ones can still pursue these aspirations even in the face of the unexpected.

This leads us to a question…

Let’s understand how to choose the best term insurance plan suited for your unique needs:

Calculate the Right Coverage

If you're certain about getting term insurance to secure your family's finances, it's important to choose a policy with the appropriate sum assured. By purchasing term insurance, you're safeguarding your financially dependent family members from potential financial hardships in case you're unfortunately gone. To determine the right amount of coverage, calculate the difference between what you'll leave behind and what your family genuinely needs.

How to make this calculation?

Understand your financial gap by subtracting what you owe from what you own.

The amount you owe: This can be broken down into three categories:

• Living Expenses Fund, which covers basic needs, groceries, and monthly bills;
• Major Expenses Fund, which includes expenses such as your children's education and wedding; and
• Major Liabilities Fund, which takes into account any loans or other financial obligations you may have.

The amount you own: This can be referred to as your Existing Funds, which include your savings, fixed deposits, and other similar assets, which are then multiplied by the relevant risk factors. The final figure you reach will represent the level of protection your family needs. To determine this, you'll need to deduct the existing amount of life insurance coverage (if any) from the total amount required. Use term insurance to bridge any remaining gaps.

Factor in Inflation

As you age, your financial responsibilities will continue to increase. You'll marry, have children, purchase a home, and have to fund your children's education, among other things. To meet these growing responsibilities and ensure that your family is always well-protected, you'll need to upgrade your term insurance cover multiple times. Additionally, considering inflation is crucial to ensure that the sum assured will be sufficient for your family in the future.

How to factor in inflation?

You have two options: you can multiply the calculated cover amount by 2.5X to 3X, or you can choose the increasing cover option.

What is the increasing cover option?

With the increasing cover feature, you have the power to automatically boost your term cover in the best way possible. By choosing this option, your term insurance sum assured will gradually increase at specific intervals until a set maximum limit. This will make sure that your family is always adequately protected.

Choose The Right Policy Duration

When choosing the duration for your term insurance policy, consider your income, savings, and future expenses. Estimate the age at which you will have fulfilled financial obligations and created enough wealth for the rest of your life, essentially when you plan to retire. This will determine how long you need a term insurance cover. You should ideally purchase a term insurance plan until your planned retirement age, possibly with an extra 5-year buffer.

Decide The Premium Payment Term

Typically, you need to pay premiums until the end of your chosen policy duration. However, if you want to finish paying early, you can opt for the limited pay option. This allows you to complete your premium payments in fewer years than your policy duration.

You have various limited pay options, such as 5 pay, 10 pay, 15 pay, etc. By choosing the 5 pay option, you can complete premium payments in just 5 years. If you prefer the 10 pay option, you can finish paying premiums in 10 years. The same applies for other options. After completing premium payments, you can enjoy coverage for the rest of the policy duration.

You also have the option to choose a single pay option, which requires you to pay the entire premium when you purchase the policy.

Choose The Premium Payment Frequency

You have the option to choose how often you want to pay premiums for your term insurance, in addition to the premium payment term. Depending on what suits you best, you can opt for yearly, half-yearly, quarterly, or monthly premium payments. Regardless of the frequency you choose to pay your premiums, it is important to establish auto-debit/standing instructions on your bank account. This will ensure that your premiums are paid punctually and your policy remains active.

Opt for the Married Women’s Property Act if You’re Married & Male

In case you've borrowed money or have taken loans and unfortunately pass away before paying it back, the term insurance claim amount will first be used to settle those loans. Only after all your debts are settled, will your nominee receive the remaining claim amount. Additionally, there may be family members who could make a claim based on succession laws. Dealing with all of this can be quite inconvenient, but there is a solution available.

If you are a married man, you have the option to purchase your term plan under the Married Women's Property (MWP) Act. By signing an extra addendum, you can ensure that the claim amount is directed to your wife and children before anyone else. This Act grants specific rights to married women, allowing them to prioritise their needs and make informed decisions regarding the payouts.

Customise the Claim Payout

If you were to pass away unfortunately during the policy's term, your family will receive the claim amount from the insurer. You have the flexibility to decide how you want your family to receive the claim amount. Term insurance offers various payout options, allowing you to select the most suitable one based on your family's financial situation.

Here are some common payout options to consider:

• Lump-sum Payout Option:
  Opt for the lump-sum payout option if you have outstanding loans or liabilities, as it allows your family to receive the full claim amount in a single payment.


• Monthly Income Payout Option:
  If you're purchasing a term plan to support your family's daily needs, the monthly income payout option is perfect. With this choice, the insurer will pay out the claim amount in monthly instalments for a set period.


• Lump-sum With Monthly Income Payout Option:
  With this option you can enjoy the best of both worlds. The insurer will provide a lump sum payment for a portion of your claim upfront, followed by monthly instalments for the remaining amount over a specified period.

Pick Riders

Riders are add-ons that provide extra protection for specific events at an extra premium. With riders, you can easily enhance the coverage of your base term plan.

Some popular riders for your term insurance plan include:

• Critical Illness Rider:
  Protects you in case of a listed serious illness during the policy period.


• Accidental Death Benefit Rider:
  Provides additional financial support in the event of your accidental death during the policy period.


• Accidental Disability Rider:
  Offers coverage if you become permanently disabled due to an accident during the policy period.


• Waiver of Premium due to Critical Illness Rider:
  Ensures your premiums are waived if you are diagnosed with a listed critical illness during the policy period.


• Waiver of Premium due to Accidental Disability Rider:
  Waives your premiums if you experience disability caused by an accident during the policy period.

Please note that there may be other types of riders offered by different insurers. The terms and conditions may vary too. It is important to carefully review the policy documents to ensure you have all the necessary information before buying the policy and riders.

Research And Comparison

Before you purchase term insurance, it's essential to conduct thorough research and comparisons. Compare different policies, including their options, benefits, features, drawbacks, and more. Additionally, consider the customer service, past performance, and other factors of the insurer. By doing so, you can make an informed decision and find the best term insurance plan for yourself!

ABSLI Salaried Term Plan is tailored exclusively for you, a salaried individual seeking comprehensive protection. With the freedom to customise your plan according to your specific needs, this solution offers both lumpsum and monthly income options. Whether it's ensuring your child’s education, maintaining a comfortable lifestyle, or meeting everyday expenses, this pure-risk term plan is designed to provide unwavering financial support. It empowers your family to embrace the future confidently in case the unexpected happens.

Some of the key Features of the Plan:

• Choose from a diverse range of 4 plan options to match your unique protection needs perfectly.
• Enjoy life insurance coverage that spans up to age 70.
• Select from versatile options for death benefit payouts, whether you prefer a lump-sum or monthly income.
• Additional protection with the inclusion of an inbuilt terminal illness benefit.

Purchasing term insurance for salaried individuals is a wise decision that provides financial security and peace of mind. By following these tips, you can navigate the process with confidence and make an informed choice that suits your needs. Remember to assess your coverage requirements, understand the policy terms and conditions, and seek professional advice if necessary. With careful consideration and a proactive approach, you can secure a term insurance policy that safeguards your loved ones' future and ensures financial stability in times of uncertainty.