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Business News/ Money / Personal Finance/  National Youth Day: How insurance products can help young Indians achieve their long-term financial goals

National Youth Day: How insurance products can help young Indians achieve their long-term financial goals

While purchasing life insurance solutions may not be the top priority for young investors, it is not only cheaper but also more advantageous that they prepare themselves for life’s contingencies by purchasing the right insurance solutions early in life.

Discovering cost-effective life insurance that suits your specific requirements is an essential component of financial planning.Premium
Discovering cost-effective life insurance that suits your specific requirements is an essential component of financial planning.

With India expected to have one of the youngest populations across major economies in the world till at least 2030, it is important to secure the financial and social security of the country’s youth in order to capitalise on this demographic dividend. Towards this end, it is critical that they develop the requisite financial skills that can nurture good financial practices and begin their wealth creation journey as soon as they gain formal employment. 

As more young Indians begin to prioritise their financial well-being over spending on lifestyle enhancements, insurance solutions that protect against the vagaries of life while also serving as saving instruments are gaining increasing popularity. Let us delve into key aspects of financial planning and understand how life insurance products can help young Indians in achieving their long-term goals.

Embarking on strategic planning for robust financial security

Considering current levels of inflation and rising mortality risks on account of rapidly evolving lifestyles, it is pertinent to have a robust plan that can financially secure loved ones even in case of premature mortality or permanent disability. These demands having a clear financial security strategy that involves purchasing saving instruments and insurance products that can create an ample financial buffer for emergencies and different milestones such as one’s retirement. To begin with, it is important to set future goals, calculate how much capital would be needed to meet them and start investing wisely in your early twenties. Consulting with an experienced financial advisor who can provide guidance on how to structure your investments and help in crafting a suitable financial strategy is highly recommended. Following it up with disciplined saving and investing habits along with periodic financial reviews is essential to achieve the set goals and enjoy stress-free living.

Also Read: Beyond financial returns: How today's youth are balancing profit with purpose with sustainable investment opportunities

Risk mitigation and safeguarding long-term goals with tailored insurance coverage

In order to adequately protect against different risks, it is vital to first identify all personal and external factors that can be detrimental to one’s health, life as well as those that can derail your wealth accumulation journey. Conducting a comprehensive risk assessment and identifying key vulnerabilities is a must to develop a holistic risk mitigation strategy. Aspects such as the number of earning members in the household, number of dependents that will need to be cared for in later years and even personal goals or familial responsibilities are some factors that ought to be considered during this stage. These findings should then be used to evaluate one’s insurance needs, being prudent to explore relevant insurance products from different insurance segments such as health, life and property amongst many others. Thus for young Indian investors, the aim should be to build a financial corpus that can be used to fulfil short and long-term goals while taking on adequate insurance protection that is tailored to individual needs.

Building a strong financial foundation through smart wealth accumulating investments

While young Indians are doubling down on equity investments due to their high-return potential, it is important to stay put for the long-term so as not to get stressed by short-term market volatility. Moreover, opting for a passive investing strategy is much safer for risk-averse investors and is more suited for building wealth gradually. Still, it is important to diversify one’s investments to create a balanced portfolio of savings, equity investments and insurance products; thereby creating wealth for the long-term while also safeguarding against various life risks with comprehensive insurance protection. 

What’s more, with a flourishing gig economy that is motivating more Indians to pursue self-employment or independent work opportunities, the role of self-sponsored life and health insurance has assumed greater importance. Not only do they offer a vital financial safety net by taking care of medical expenses in times of health emergencies, but can also compensate for loss of income in case of permanent disability and provide dependents with a substantial death benefit in case of the insured’s early demise. That said, for those looking to build wealth while protecting themselves and loved ones against such unfortunate situations, life insurance savings plans that strike the right balance between comprehensive insurance coverage and long-term wealth accumulation potential can be most ideal.


(Niraj Kumar is Chief Investment Officer, Future Generali India Life Insurance Company Ltd)

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Published: 12 Jan 2024, 05:30 PM IST
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