The super proactive millennials and Gen Z currently make up the majority of the Indian population. Be it earning, saving or gaining the return on investments, they have absolutely outdone all previous generations.
According to a survey, a surprising 32 percent of the Indian Gen Z are inclined toward saving more than spending, and only 5 percent said they’d choose leisure over saving. Now, one can’t deny the role of the global pandemic in this sort of a mentality where the youth is highly aware of financial planning, their health, and consequently, the importance of insurance. Moreover, as natural risk-takers, the Gen Z tend to set themselves to start earning early, which makes it crucial for them to know proper financial planning.
Now, with the evolving mindset of the current generation, the modes of financial planning and insurance have also leveled up. It’s all better and easier because all that Gen Z counts on are the convenience of planning and ease of execution. Because let’s face it, nobody likes long lines and piles of paperwork.
What attracts today’s youth are the return on investments and lucrative bids, but what they fail to understand is the importance of being prepared for emergencies. Consequently, life insurance remains a push product that has to be force-sold to them.
Why should Gen Z get term insurance early in life?
Adding a term life insurance policy is not mandatory if you don’t have dependents. But buying a policy at an early age helps you to lock your premium at a lower cost, thus reducing the total expenditure on life insurance over the course of time. Also, it becomes extremely important when you have any kind of loan to ensure your family doesn’t face humiliation from the bank for loan recovery.
And, of course, there’s the advantage of tax benefits under Section 80C of the Income Tax Act. 1961.
What’s most important here is that the Gen Z considers the following factors in choosing the right insurance:
● Brand name
The first step in selecting the best insurance policy will be a good brand name with an excellent track record.
● Claim settlement ratio
This is the total percentage of claims that an insurance provider settles in a year out of the total claims made on the company. The claim settlement ratio of a brand should not be less than 95 percent.
● Premium affordability
The premium you pay for your policy will differ from company to company. If you take the insurance through an agent, the premium amount will be higher. Thus, it is advisable that you get the insurance online and with no middlemen involved.
● Sum assured
The Sum Assured (SA) is the fixed amount that a nominee will get in case of any unfortunate event to the insured person. The policy buyer should make sure that the SA is sufficient to fulfill the needs of the nominee.
● Riders to add
An insurance rider is an add-on to the basic insurance policy. The policy buyer should never forget to add critical illness and accidental death riders along with the policy, as these riders provide additional coverage and added protection against the risk.
Starting early with proper financial planning and getting insured can prove to be the smoothest way to a comfortable future. And since the new generation is more likely to be the creators of their success stories rather than the followers of someone else’s, they’d need financial security more than anything else.