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Why millennials should invest this festival season

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Why millennials should invest this festival season

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Recent reports indicate COVID-19 has been affecting infants/toddlers as well as those from nine to 90 years.

Why millennials should invest this festival season
Authored by Akash Anand
A celebratory vibe is already in the air as the festive season is around the corner. As millennials get cracking on preparing their festival shopping lists, gifts, dry fruits, OOTDs and mithais are almost always among must-buy items.
But this year, given the uncertainties of life in times of the coronavirus pandemic, another item should be a basic part of their to-buy list – Term Insurance.
For millennials arching their eyebrows, some elaboration is necessary. Recent reports indicate COVID-19 has been affecting infants/toddlers as well as those from nine to 90 years.
Although the mortality rate remains low, there’s no certainty whether a millennial or Gen X person kicks the bucket or stay safe. While the latter may have some form of insurance, there is a solid likelihood many millennials don’t have a term insurance policy as yet.
Financial Security
Presently, when no one can state with certainty that s/he won’t fall victim to the coronavirus, considering the larger picture is essential for millennials. Therefore, while regular festival gifts have their charm, a greater gift should be given to one’s family – an assured and secure future in case of any unfortunate happening.
Here’s where a term insurance policy fits in.
Among different term policies, term life insurance tops the list. This is a pure protection plan offering death-risk cover or benefits in case of the policyholder’s death. It is the cheapest and simplest form of life insurance for real, providing the highest financial coverage for the premium paid for a specific ‘term’ determined by a sum assured, ascertaining their loved ones always stay happy and secure, financially.
If the unforeseen happens, the nominee receives the specific sum assured either via a single pay-out or through monthly installments for a predetermined period as per policy terms.
The beauty of term insurance is it provides the max cover at low premiums. Moreover, millennials benefit if they invest in a term policy at a lower age of entry, ensuring lower premiums.
At approx. 426 million, millennials account for about 47 percent of India’s total workforce and comprise around 34 percent of its population. Given their tech-savvy nature, most millennials prefer online transactions due to the comfort, convenience, ease and speed of purchase from the cool comfy couches of their homes or offices, unlike traditional transactions.
Term Insurance Options
Besides term life insurance, there are other term policies. These include ULIPs (Unit-Linked Insurance Plans), endowment plans, money-back policies, whole life insurance, child plans and retirement plans.
ULIPs offer three benefits – insurance, wealth creation and tax savings. All three elements are perfect for millennials planning their future.
Endowment plans are a combo of insurance cover and investment opportunities. If a policyholder passes away, the nominee/family receives the sum assured. If the insured outlives her/his policy period, the person receives the sum assured plus any accumulated bonus.
Money-back policies give the insured specific amounts at preassigned intervals of the policy period as well as a sum assured, either on maturity or death. An accrued bonus also becomes available on maturity.
Whole life insurance covers the insured during her/his lifetime or, in certain cases, up to 100 years. If a policyholder dies, the sum assured goes to the nominee. If the insured lives past 100, s/he receives the maturity amount.
The child plan builds a capital base for major events in a child’s life, including education, overseas studies, marriage or other milestones. On reaching 18, the child plan offers the insured a one-time payment or annual pay-outs.
Finally, there is the retirement plan. This creates substantial savings for leading a stress-free life during the retirement years. On reaching 60 years, policyholders can opt for a single lump-sum payment or annual payments. If the insured is no more, payment is made to the nominee as per coverage terms or the fund value or 105 percent of the total premiums paid.
What’s more, a term insurance policy can be bought online – safely, securely, swiftly. Many entities offer such policies.
These insurance players guide millennials about policies that suit individual needs, based on a combination of factors.
Now, as the festive season gets going, millennials should choose a non-perishable, more beneficial gift, term insurance – offering long-lasting benefits for them as well as their near and dear ones.
Akash Anand is Founder and Managing Director – Bimakaro
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