Your twenties and thirties are a thrilling time. While the 20s mark higher struggle and dedicated hustle, the 30s usher in more stability, better clarity and higher responsibilities. The 20s are about building a foundation for your future, the 30s mark the start of your family life - you have more dependents. You are responsible for the well-being and security of not only your parents but also your spouse and children.

 

The start of your family life might lead to a home loan, a car loan and higher financial liabilities. You need to start saving up for your and your spouse’s post-retirement life, children’s higher education, their marriage, the annual family trips and other financial obligations.

 

Thus, as thrilling as the two decades are, they bring an equal level of stress. While you do everything to provide the best for your family, it is important to ensure they can continue the same standard of living and meet all their financial obligations even in your absence.

 

One of the best ways to secure your family’s financial future is through the right combination of insurance plans. So, if you are under 30 years of age and looking for some guidance regarding the right life insurance plans, read on.

 

Life Insurance Tips for Policyholders Under 30

 

 

• Early bird gets the low premiums: The premium you pay for your life insurance plan will depend on how risky you are to insure. Life insurance companies check the health and other mortality conditions to determine the cost of insuring an individual, which translates into the premium you pay.
  
  
• You and your money grow together: Life insurance plans are of various types. While the pure life term plans offer basic life cover, there are life insurance plans which offer a savings component.
  
  Guaranteed¹ savings insurance plans (endowment plans/money-back plans/regular income plans) or Unit Linked Insurance Plans (ULIPs) offer regular payouts and maturity benefits. Here a part of your premium is invested in various avenues to offer long-term savings. Guaranteed¹ savings plans offer assured returns and ULIPs offer market-linked benefits. Now, the effective mantra for building wealth is the “Compounding Effect.”
  
  So, if you are buying a life insurance plan with returns, buy it as early as possible to allow more time for your money to compound, thereby offering better and apt returns.
  
  
• Determine the right sum assured and tenure: The sum assured is the money your loved ones receive in case of any eventualities. Thus, it is critical to choose the right coverage to ensure optimum protection for your family in your absence. When deciding the sum assured, there are a few things you need to consider:
  
  
  • Your current standard of living - regular, day-to-day expenses
  • Future financial obligations - retirement planning, children’s education and marriage, major purchases, travels, etc.
  • Current financial liabilities - home loan, vehicle loan, credit card outstanding and other loans.
  • Any other specific requirements - health issues of elderly parents and necessary treatments, family’s planned foreign trip, etc.
  • Do not forget to account for inflation
    
  
  Once you decide the sum assured, determine the insurance tenure. Generally, you should be insured at least till your retirement age. Most people repay all their liabilities by the time they retire, the children are grown up, and there are enough liquid assets (savings + investments) to take care of any major financial requirements. However, you can even opt for whole life coverage (up to 100 years of age) if you require extended protection even after retirement.
  
  Based on your choice of sum assured and tenure, you can use the online life insurance calculators to get the exact premium outflow. You can modify the sum assured if the premium is exceeding the budget.
  
  
• Choose your product wisely: In today’s times, it is understandable to get confused by the extensive variety of life insurance products available in the market. However, there is also extensive information available online as well as offline to help you make the right decision.
  
  Here is a quick guide to some popular insurance products. Regular family term life insurance offers basic life cover, with no maturity/survival benefits. Due to its no-frills-attached, pure life cover, term plans offer extensive coverage at extremely affordable premiums.
  
  If you wish to get long-term savings and assured returns with your life cover, you can go for guaranteed¹ returns savings plans. These come in various forms like an endowment plan, monthly income plans, etc.
  
  Unit Linked Insurance Plans or ULIPs offer market-linked returns with life cover. You can choose funds of your choice based on your risk tolerance.
  
  Apart from these, you can also check out retirement-specific plans, annuity plans, group insurance plans and so much more.
  
  
• Diversification and portfolio building: Your financial obligations and income change at every stage of your life. In your 20s, you have lower liabilities and a lower income. As you grow older, the income goes up, but so do the liabilities - family expenses, loans, etc.
  
  Further, as you reach your 50s, you repay the loans, children stop being dependent and your liabilities go down. As a result, you need to diversify and modify your portfolio based on your needs.
  
  As you build a family, you need separate funds for your children’s future, your spouse’s needs, your elderly parents, etc. You can either have a single plan that provides for all these needs or diversify your portfolio with varied plans to satisfy all the varied needs.
  
  

At Tata AIA, we understand how important it is to balance varied financial needs and therefore offer innovative plans for your benefit. Our term insurance plans offer whole life coverage and life stage benefits to ensure all-round protection.

 

Similarly, you can opt for our comprehensive insurance plans that combine the benefits of term insurance with critical illness benefit, hospital care benefit, accidental death benefit and accidental total and permanent disability, all within a single plan by paying a single Tata AIA term plan premium.

 

Conclusion

 

Hope the above life insurance tips help you find the right insurance plan for your needs. To ensure financial freedom and optimum protection in your 30s remember to buy early, allow the money to compound, select the right product, calculate the optimum sum assured and tenure and finally, do not forget to diversify.

 

For more assistance with choosing the correct life insurance plan, life insurance tips and insurance claim tips, you can get in touch with our experts today.

 

L&C/Advt/2022/Sep/2259