The millennials who are working in unorganized sectors should go for protection plans first and savings plans next. They are people of very modest means but with dependents in the form of wives, children, and parents. Most migrant workers fall under this category. Protection plans are not too pricey and therefore even in case of loss of employment for a few months, they should be able to keep the policies in force. The insurers should design products in such a way that even in case of temporary job loss, there is an auto cover period of say, two years.

However, as the economy grows further (which it will in the next few years), even the migrant workers should be able to cover other financial risks of life. Term plans, after all, cover risks of premature death only and as the name suggests, are generally taken for a limited period of time. There is a financial risk of living too long as well. So, as the workers employed in unorganized sectors earn better, they should think beyond term plans and start buying insurance plans that take care of the financial needs that will arise post-active working life.

For the other two groups of millennials, I don’t think term insurance is of much use. The educated and decently earning millennials are at a much better financial footing than their parents had been at their ages. Now, nobody really depends on millennials financially, neither their parents nor their spouses. Today, most educated millennials have two incomes in their families. If we talk about premature deaths, the actuarial tables suggest that among 100 millennials aged 30 years, only three may die on an average before reaching the age of 60.

Moreover, many of them will get generous group insurance cover from their companies. The fact is, millennials earn reasonably well these days. But they carry a set of attitudes completely different from the earlier generations. Today’s millennials are far from loyal to their company although they are extremely productive as long as they stay there.

Whole life protection

They do not hesitate to leave plum jobs and start doing something of their choice. They always have something to fall back on in case they face financial difficulties. The result of all this is that they may not be saving enough for their golden ages. Protection plans cannot manage the risk of living too long. Even if one takes a whole life protection plan, the money does not come to be of any use to the insured during his lifetime and the premium will be very high.

The solution lies in buying annuity plans and whole life plans. While annuity plans enable the insured to earn a steady stream of income throughout life, the whole life plan ensures that cash values are always available for the life assured to meet various liquidity needs.

Moreover, whole life assurance serves like a permanent life assurance even when income stops but some financial protection may still be needed for the children who are yet to become financially independent or require higher education that demands heavy investments.