A life insurance policy happens to be one of the easiest ways to ensure your family members do not experience financial stress after you are gone. Depending on the type of policy chosen, there are various other benefits the policyholder may experience. For example, if you choose a ULIP, you can also get maturity benefits in the form of market-linked returns, although at a slightly higher premium cost.
However, if you are not keen on maturity benefits but seek to have the security of a life cover at cost-effective rates, you may consider term insurance. But when should you consider buying a term plan? Is there a right time or a right age?
When to Buy Term Insurance?
A term life insurance plan is one of the most fundamental life insurance plans available in India today. In return of the premium paid by the policyholder, it offers coverage for the life assured for a selected duration.
Given this structure of the plan, it is easy to assume only a certain type of individual would find optimal use for this life cover. However, this is far from the truth. A term life insurance plan can prove useful for a wide variety of people across the lines of age, gender, income levels, and more.
It is often recommended that term insurance be purchased as early in life as possible. For several reasons, this may prove to be sound advice. For instance, age is a key factor in determining premium amounts for your term insurance. So, the older you get, the higher the premium amount may be. Another key reason is having coverage for a longer duration, which means you are secured through some of the key milestones of your life.
Is it Too Late to Buy Term Insurance?
If you have not purchased a life cover early on, it does not necessarily mean that it is too late to get a life cover. Buying a term life insurance plan is a decision that can support your loved ones through the uncertainties of life, thus giving you some peace of mind.
Hence, irrespective of your age, you can opt for a term life insurance plan if you feel the need for one and have the resources to include the same in your financial plan. Do remember to check whether the life assured is within the prescribed term insurance age limit.
What is the Age Limit For Buying Term Insurance?
The age limit for term insurance may differ from one plan to another. For most plans, the upper age limit for purchase is 65 years. If you purchase the plan at the term insurance maximum entry age limit, you may be able to secure coverage for approximately another 10 years. This will make your plan valid till about 75 years of age.
However, since these conditions tend to vary, it is ideal to check plan details and age limits to make an informed decision.
Term Insurance at Every Age
Buying a term plan in India is a decision one should base primarily on their unique requirements, budget, and overall financial planning. Hence, the need for such a plan may be felt at any age.
Let’s look at what term insurance at various groups looks like, and why is it important.
Term Insurance in Your 20s
The majority of salaried and independent workers begin working in their 20s and have comparatively few responsibilities. However, some people could have additional obligations such as repaying student loans or providing for their families. Obtaining a term plan can protect your dependents in the sad event of your passing. You may also benefit from the low premiums available to people in their 20s, since term plans in India are cheaper when you are younger.
Term Insurance in Your 30s
In your 30s, when you begin a family, the demands increase significantly. Additionally, you can be responsible for a number of debts, including a car or home loan. You can safeguard all these life goals by purchasing a term plan. You can choose a policy with a lower sum assured, if you believe the premium is out of your price range. Make sure you are thoroughly aware of the benefits and the term policy age limit before purchasing it. You can choose the appropriate payment interval based on your lifestyle and existing commitments.
Term Insurance in Your 40s
You may have repaid the majority of your debts, including student loans, car loans, and mortgages, by the time you are 40 years or older. However, there may still be other obligations, such as retirement planning, home loans or saving for your child’s education. Your family's future and objectives will be secured if you consider your present and future commitments that need to be met.
Term Insurance in Your 50s
Once you reach the age of 50 or more, the premiums for term insurance considerably rises. However, buying term insurance for a 50-year-old in India is still advised. As you are growing older, you might have some medical expenses coming up that you need to save for. Your child might also be getting ready for higher studies, or you may desire to live in your dream home. In the event of your untimely passing, your term insurance amount can cover these financial commitments, without burdening your family. Additionally, the term plan can provide a cushion to protect you from expenses toward certain critical illnesses that could drain your savings.
Term Insurance in Your 60s
At 60, you are either close to retirement or have already retired. In India, the maximum age limit to purchase a life insurance policy is 65 years. As long as you are within the term insurance entry age limit, you can purchase the policy. Term insurance can cover you for the duration of your choice. There are some policies that offer coverage till 99 years. Hence, a life insurance policy can still be taken in your 60s.
Term life insurance plans are one of the most accessible options for a life cover. Not only do they make for an accessible option of for a primary life insurance policy, but could also be used as an add-on policy. Whatever age you may buy these policies at, ensure that you are using a term life premium calculator to get estimates based on your specifics. Also, understand the inclusions and exclusions of the plan, so you may make an informed decision.