Currently, in our nation, a Term Insurance plan is becoming a go-to policy for every newbie who wants to secure the future for him/herself and her/his family. A term insurance plan helps you safeguard your and your family's future against untimely death or other uncertain events of life. In case of the untimely demise of the policyholder during the policy term, the nominee gets to receive the entire sum assured from the company. This is not a lot for the grieving family in the absence of the breadwinner; however, this is enough to meet their immediate financial expenses. With the help of the sum assured amount the family can meet their household expenses, pay education loan, home loan, they can pay off any kind of debt and liability or they can use the money to meet their immediate life goals.
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When it comes to policy tenure, the industry experts say that every age is a good age to buy a term insurance plan, provided your monthly earnings are enough to pay premiums. Usually, the insurance companies provide coverage to individuals for up to 75 years of age or 85 years, in some rare cases, few provide coverage to the age of 99 years. This means, the policy term varies from 5 years to 40-45 years, it depends on your requirement and age as to how many years of cover you want to buy.
Whether you want to buy a term insurance plan at 25 years of age or 40 years of age. Some key factors might affect your term insurance premiums at different stages of life.
One more aspect to note here is, the 'policy term' is a period that determines your policy's premium. You are required to calculate wisely, that, in the uncertain times of life, for how many years of financial coverage you want to provide to your family.
Now let us consider few factors based on age, to determine what would be the right age to buy a term insurance plan:
The 20s are the most crucial time of your life. The new beginnings make this phase of life a little kafkaesque. However, you can bring your life logically in order by becoming financially sound. Since you are just starting off, it is mostly considered that at this age you would have fewer responsibilities. Having few financial debts can make it a little heavy on you, such as an educational loan or in rare cases, a home loan- your untimely demise can make it severely difficult for your parents/family to deal with your death and heavy debts at the same time. You need to be financially wise enough to decide in favour of your family's future.
To support that, a term insurance plan comes to the rescue, it provides a death benefit to the family of the insured. Being in your 20s comes with the advantage that premium payable will be very cheap. This is out of the sheer fact the risk of dying in the 20s is very less compared to the risk of dying in the 50s or above.
The 30s come with a full bucket of responsibilities. Most people get married by this time, some have children. Based on the common plan, many individuals have home loans, car loans, education expenses of the child, health expenses of aging parents. Being the breadwinner for the house isn't that easy, eh? It comes with stress and unavoidable obligations.
If you haven't bought a term insurance plan by this phase, the industry experts suggest it best to start now, because even though you have other financial responsibilities, you also have a regular income source. You can utilize the money to safeguard the future of your dependents against the uncertain eventualities of life. God forbid, if anything happens to you, the death benefit in terms of lump-sum amount and monthly pay-outs can help your family pay off debts and meet expenses in your absence.
By this time, you might have paid off your heavy debts (such as car loans, home loans, etc.) or must be near to the completion of paying them off.
However, considering the sensitivity of this age of life, you do require a solid financial backup for your old age. Consider it alarming, especially when you are the sole earner in the family. Your aging parents might be dependent on you, your spouse, your children, and others look up to you for their financial security.
Buying a term insurance plan with a larger cover can prove to be a good decision. It can work in your and your family's favour in the most uncertain events of life.
The only drawback of buying a term insurance plan in your 50s is the high cost of premiums. And your health doesn't play a big role in changing the premium amount. In other words, even if you are healthy and follow a good lifestyle, you will still have to pay a higher premium amount.
However, it is still advisable to buy a term insurance plan in your 50s or above age. You must be the sole earner in your family, or you might have loans to pay, or you would want to leave enough money behind for your spouse so that he/she can live independently in your absence.
People are different, their needs and life goals are different. There will be someone who might need a term insurance plan today; however, the other person would plan it after 5 years or even a decade.
You must only go by your present requirements and future lifestyle goals. You have to be wise and calculative enough to decide the policy term, coverage amount, monthly premiums, and so on. To conclude it in one sentence, it suffices to say, the right age to buy a term insurance plan is when you realize the need for it.