No Limit Of Age To Buy Term Insurance Plan

A term insurance plan is a type of life insurance plan that is considered to be one of the best options in insurance. It can help an individual plan and protect his/her family’s future by making periodic payments of a fixed amount. This insurance plan can be purchased at any time and age and can still may mean different things in terms of policy premium and financial goals.

Read on to know what a term plan offers to different age groups.

• In 20’s: Most people start their professional careers in their early 20’s and have fewer responsibilities as compared to other stages in their life. This is the age where most life insurance companies offer the lowest premiums because the risk of death is considered to be the least in this age slot. Generally, a 20-year-old can get a life cover of Rs. 50 lakh for a small premium that falls between Rs. 3000 – Rs. 4000 per annum.

• In 30’s: As a general trend, the 30’s is the time slot when most people get married and have children. This is the time when responsibilities increase, and the need for a term plan becomes crucial too. A person who hasn’t invested in a term plan in their 20’s should consider doing so in their 30’s. In this age bracket, they are expected to get the second-lowest premium slab.

• In 40’s: 40’s call for greater financial protection because this is the time when individuals need to gear up their finances for their retirement while helping their children with higher education (if needed). In this age slot, individuals are generally advised to buy a policy with a bigger coverage. In general, a 40-year-old male who does not smoke and has a good health record can buy a cover of Rs. 50 lakhs at a premium of Rs. 7198. This premium can rise even further, if the term plan is considered in the 50’s.

• 50’s and Later: An individual in the 50’s will have to pay a very high premium as compared to 40-year-olds. The higher premium amount is despite the health status and lifestyle habits like smoking and alcohol. However, it will still be a good idea to invest in a term plan, if the liabilities and debts are more and the earning members are less in the family.

Importance of Term Insurance

Term insurance is like a cushion that comes to the rescue of a family when the most important person in the household is unfortunately no more. There’s probably no other reason that can be as important as this. Nevertheless, here are three reasons that make term insurance very important.

• Tax Benefits: A term plan offers tax benefits under Section 80C of the Income Tax Act, 1961. Also, when the insurance company pays the death claim, the receiver gets the same as a tax-free amount.

• Low Premium : The premium for term plans is lesser than the premium for cash value policies. This means that the premium of an endowment life insurance policy will be more than the premium for a term plan.

• Number of Options: All insurance providers offer term plans. Therefore, several options can be compared for structure, benefits and price before making a decision.

What is the Right Age of Buying a Term Insurance?

Generally speaking, the right age for buying term insurance is when an individual is healthy and young. So, 20’s can be considered to be the best time to claim small premiums and huge number of options. The 20’s are when insurance providers rally around to offer their policy, and the person will have options to choose from. Once age and good health deteriorate, the situation turns around with insurance companies refusing to offer a policy for a number of reasons.

Key Points to Remember

• Premiums for term plans increase with age. To enjoy smaller premiums, it is important to buy term plan early in life, for both genders.
• Smokers of all age groups have to pay higher premiums. So, it would be good to quit smoking and wait for some time before buying a term plan to enjoy smaller premium amounts.
• Yearly premium is better than a one-time payment for a term insurance plan.
• An increased premium after medical check-up often indicates health risks. It should be accepted without worrying about the insurer’s intention.
• It is not necessary to buy the riders that are offered along with a term insurance plan.
• It is crucial to share all the health-related details while buying a policy. Hiding even a single fact can lead to a breach of contract and non-payment of claim amount.

What is Not Covered in Term Insurance Plan?

Certain conditions are not covered in a term insurance plan. Every insurance provider lists them in detail on the insurance document. It is advised to read all the documents carefully before signing the papers to avoid issues while claiming. Here are the instances or situations that are not covered in term insurance.

• Death due to suicide or self-inflicted injuries.
• Accidental death caused by drinking, or under the influence of drugs or alcohol.
• Death due to participation in racing events.
• Death due to adventure sports like hiking, water sports and trekking.
• Death due to life events like pregnancy and child birth.
• Death due to participation in illegal activities.
• Death caused by pre-existing health conditions.
• Hiding the information of about lifestyle habits like smoking.
• Death caused by HIV/AIDS.
• Death caused by natural disasters. Some companies offer this insurance with an additional rider.

Investing in a term insurance policy is a great way of financially securing your loved ones. Every earning member of the family should consider buying term insurance at an early age. Yes, you may never get back the money you invest in it year after year, if you survive the term of the plan. However, the support it provides when needed is worth it. Most term plans do not pay any amount of money once the policy gets over, but some may offer the premiums paid back to you. These term plans are costlier than the others. Check out multiple insurance plans and compare them with each other before settling down for the one that fits your budget and offers the benefits you are looking for. Also, buy it as early as possible.