When you’re in your 20s, insurance often feels like a “later in life” decision. With no dependents, modest savings, and career just beginning, paying premiums might look like an avoidable expense. But experts say starting young is actually one of the smartest financial moves you can make.
Why? Because insurance bought early is not just cheaper—it also ensures financial security as your responsibilities grow in the future. Let’s break this down for two common situations: a 26-year-old salaried professional and a 29-year-old freelancer.
Table: Life Insurance Needs in Your 20s
| Factor | Guidance for 20-somethings |
|---|---|
| Income Cover | 10–15x your annual income |
| Dependents | None yet? Start with ₹50 lakh–₹1 crore |
| Premiums | Lowest if locked in your 20s |
| Flexibility | Many term plans allow increasing cover later |
| Best strategy | Start small, upgrade with milestones (marriage, home loan) |
Why Consider Life Insurance in Your 20s?
For someone just starting their career, life insurance might feel unnecessary. But here’s the catch—your 20s give you the lowest premiums for the longest cover duration.
Example: A healthy 26-year-old non-smoker can secure a ₹1 crore term cover for just ₹7,000–₹10,000 annually. That’s often less than what many spend on coffee or weekend outings.
Even if you don’t have dependents today, a basic cover of ₹50 lakh–₹1 crore can safeguard against future responsibilities—whether that’s supporting parents, repaying a loan, or securing your family later.
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How Much Life Cover Should You Buy?
A simple way to estimate is the 10–15x annual income rule. But a more accurate method is to factor in: Current income and lifestyle needs, ,Future responsibilities (marriage, kids, elderly parents), Loans or liabilities you may take on later.
Health Insurance for Freelancers: What About Therapy?
Unlike salaried employees, freelancers don’t get corporate health benefits. That makes personal health insurance essential. At age 29, a ₹10 lakh health cover is a practical starting point, usually costing around ₹10,000–₹15,000 per year.
Mental Health Coverage: What’s Included?
Thanks to the Mental Healthcare Act, 2017, insurers must treat mental and physical health equally. Most policies now cover psychiatric hospitalisation. Outpatient therapy (counselling, online sessions, OPD visits) is still limited. These are usually part of OPD add-ons, but annual caps (₹5,000–₹10,000) mean they won’t cover all costs. Some digital-first insurers now experiment with OPD and wellness packages, which include teleconsultations and therapy—but they’re not yet mainstream.]
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Start early, pay less: Buying insurance in your 20s locks in affordable premiums for decades Don’t overcommit: Begin with a modest cover and increase it as your salary and responsibilities grow. Freelancers need extra planning: Without employer health benefits, a personal policy is essential—just ensure it includes mental health and OPD features if relevant. Therapy coverage is evolving: While hospitalisation is covered, outpatient counselling is often capped, so budget separately for it.