Life insurance might not be at the top of the priority list for most young professionals in their 30s. However, given the rising financial responsibilities like home loans, family commitments, and increasing healthcare costs, buying life insurance early can be a smart financial move.

Let’s break down the pros and cons of purchasing life insurance.

Pros

• Affordable Premiums:

Life insurance premiums are primarily based on your age and health. If you buy insurance in your 30s, the premiums are significantly lower compared to purchasing in your 40s or 50s.

Many insurers offer term plans with ₹1 crore coverage for just a few hundred rupees per month. The younger and healthier you are, the better your chances of securing lower premium rates.

• Family and Dependents Protection:

For youngsters in their 30s, supporting parents or a young family is a key responsibility. A life insurance policy, or a term plan, ensures that your family is financially secure even in your absence. It acts as a financial safety net for your spouse, children, and even aging parents, covering everyday expenses and any future goals like children’s education​.

• Coverage for Loans and Liabilities:

With many Indian professionals taking home loans, car loans, or personal loans, life insurance can help cover these liabilities. In case of an untimely demise, the insurance payout can clear debts and relieve the financial burden on your family.

• Tax Benefits:

A key benefit of life insurance in India is the tax deduction under Section 80C of the Income Tax Act. Premiums paid towards life insurance policies qualify for a deduction of up to ₹1.5 lakh, helping you save on taxes while securing your future. Additionally, the death benefit received is exempt from tax under Section 10(10D), making it a financially prudent option​.

Cons

• Too Expensive for Older Individuals:

Life insurance premiums increase significantly as you age, primarily due to potential health issues and the higher risk associated with older applicants. For individuals over 60 or 70, obtaining a policy can become particularly expensive, as premiums rise steeply with age. To secure more affordable coverage, it’s smart to purchase life insurance in your 30s when rates are lower.

• Lower Returns Compared to Other Investments:

While some life insurance policies offer both protection and savings, their returns tend to be lower than those from dedicated investment products. People seeking higher returns might find life insurance underwhelming compared to mutual funds or other financial instruments.

• Too Many Policy Options:

With numerous insurers and a wide variety of policies in the market, selecting the right life insurance policy can be overwhelming. Some plans have complex terms, making it hard for buyers to make informed decisions without deep financial knowledge.

Another drawback is that life insurance claims can be denied if policy terms aren’t met. To avoid this, it’s important to understand the policy’s details and choose a reliable insurer. Aviva Life Insurance, for instance, has a high claim settlement ratio of 98.75% and an easy claims process, offering greater peace of mind.

Should You Get Life Insurance in Your 30s in India?

For most young professionals, especially those with family responsibilities or loans, life insurance is a smart and affordable way to ensure financial protection. The best insurance policy is a combination of lower premiums, tax benefits, and large coverage amounts.

Popular policies offer flexible term options with high coverage at affordable rates. Comparing policies from different insurers and considering add-ons like critical illness coverage can help you make an informed decision.

It’s important to evaluate your specific needs, consult an insurance advisor, and choose a policy that aligns with your financial goals and family requirements.