An insurance plan that ticks all the right boxes especially if you want your family to be financially sound after your death, are term insurance plans. It is one of the best investment instruments that affirms your family of that much needed support. Every insurance company therefore offers its investors a range of term insurance options to choose from. All tailor cut to suit every individuals need and confronting every aspect of requirement.
Now the big question on everyone’s mind is; what is the right time to buy term insurance plans? A valid question, since not many potential investors are aware of the prospects of early investments in term plans. Most believe that term insurance plans are an excellent buy if you are anything above 35 years, as they are well settled by then.
The answer to what is right time to buy term insurance plans is that the earlier you begin investing in it, the better it is. If you invest in a good term insurance plan when you are younger, which is the right time to buy term insurance plans, the premium payout is lesser. Investing early in term insurance is a sign of a good investor and is also the right time to buy term insurance plans, as they focus on reaping benefits. Investing early is better because when you are young there are lesser diseases that riddle you. The older you grow, lifestyle diseases shows its ugly face, and this is why your premium increases.
Let’s discuss this with different stages of your life; this should give you a fair idea of your insurance requirements.
Early 20’s and Unmarried
Today most people prefer to marry late in life, you could be an added income to your existing family. Your expenses are much less and this is the time you look forward to create a financial cushion for your later years. Term insurance at this phase is much affordable and helps save on tax, making it right time to buy term insurance plans.
Mid/Late 20’s and Married
This is a crucial time, as you’ve just begun or will begin a new chapter in your life. For newly weds, this is a perfect time to invest so that you create a good financial backing for your family that is sure to grow in a few years time. At this phase a term life insurance taken will need to have more coverage as compared to your earlier investments.
This particular stage in your life is where your responsibility grows as a parent. Children’s education, extra curricular activities, other sundry expenses, medical expenses take the spotlight. Here is when you think of protecting your family and ensuring they are financially secure when you are gone. Your long term debts should be covered and with the added responsibility you will need to secure yourself and your family firmly with a higher protection term policy.
Although not the right time to buy term insurance plans, once your kids are in college or pursuing their higher education you need to start planning for your twilight years. This is when you need to shift focus and probably settle for a few good pension plans that will fund you and the lifestyle you plan to retire into. It is also important to consider premature demise and how your investments will support your family and their lifestyle after you are gone.
When buying or considering a term insurance policy, there are also a few decisions you need to make as an investor.
Sum Assured/Life Cover - This is the amount that is payable to your dependents, in case of your premature death. Before choosing a policy, ensure that your family gets enough in terms of Sum Assured. If the life cover is not unto the mark, look into other policies that meet your requirement. There are several term policies available online and this is one advantage that you should make the most of. Your goal here as a policyholder is to ensure that your family gets enough financial support to help them lead a happy, healthy life even when you are gone.
Tenure of Your Policy - When buying a policy check its tenure. Look for a policy that will cover you and your family until you retire. Although 60 years is not a definite retirement age these days neither do your liabilities end then, however, take that as a benchmark. Experts recommend that term plans should cover you till you reach 65 years. A term plan that fulfils all of your financial needs is the best in your list.
It is advisable to buy a term plan as early as possible in life, as that is right time to buy term insurance plans, along with ensuring that you get the desired life coverage. Buying a term plan early in life is also much cheaper as compared to later stages in your life. Once you cross 35 years, there are possibilities of insurance companies declining your policy or could even charge a higher premium. However if you have missed investing in a term plan early in life, which is the right time to buy term insurance plans, the sooner you invest the better it is for you and your family.