Why look into life insurance in your 20s? Life insurance often seems unnecessary in your 20s, especially when you’re just starting your career and may not yet have major responsibilities. But this is also when premiums are lowest because insurers view younger people as lower-risk. Starting early means locking in affordable rates that will remain steady even if your health changes later. It’s less about immediate need and more about long-term financial security.
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How to calculate the right coverage The general rule is to buy coverage of 10 to 15 times your annual income. But the right figure is entirely your own circumstance. Ask yourself: do you have family members who depend on you financially, student loans, or dependent parents? If yes, you'll likely need more coverage. Otherwise, a smaller policy to cover debts and funeral costs until obligations grow will be enough.
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Term insurance vs. whole life For the majority of individuals in their 20s, term life insurance would be the cheapest and most sensible choice. Term schemes give protection for a specific number of years, typically 20 or 30 years, at a low price. Investment-linked or whole life schemes might appeal to you, but these tend to come at a cost and are typically not necessary when just starting to accumulate wealth. The key at this point is to get sufficient cover without breaking the bank.
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Adding future goals Your insurance needs are most likely going to rise as your life goes on. Marriage, kids, or a house all bring more financial burdens. Selecting a term policy with enough coverage to fit future goals guarantees your loved ones are taken care of even if your situation shifts. Most policies allow riders or added coverage down the line, so flexibility is key. Think of it as life milestone preplanning.
Don't forget debt protection Even if you don't have dependents, life insurance can save your family from debt burdens. In India, for example, education loans co-signed or credit card debt can fall on your parents in the event of an untimely demise. A tiny policy keeps them from having to make payments. For young working professionals who have EMIs or common money commitments, this is a strong reason to get insurance sooner rather than later.
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Finding the right balance If your earnings are ₹6–8 lakh annually, a term cover of ₹1 crore will usually do. This will give you adequate protection without pricing premiums too high. Premiums for the same can be as low as ₹500–700 per month if you buy in your 20s. Don't shell out more, but also don't under-insure. It is always wise to buy a higher cover initially and regret less than not having a cover at all.
