One of the prized possessions most of us have is the family. And, as a family member, you would want to ensure the well-being of all your loved ones throughout their life. And to ensure that they don’t ever face any financial hardship even in your absence, it is paramount that you secure their future by buying a robust life insurance policy.
Life insurance gives your family a financial cushion and helps them take care of their everyday needs in the event of your untimely demise. So, while buying the right insurance policy for your family, you must analyse their various financial needs.
Choosing the right Insurance policy based on your age
Your financial status and requirements may change through different stages of life. For example, when you are unmarried, you may have different financial responsibilities compared to when you get married or become a parent. However, throughout various stages of life, you would need sufficient life insurance protection.
In your 20s
If you are young and in your 20’s, you may not have too many financial responsibilities or financial dependents. However, you may still need a life cover to give your family financial protection. In such a situation, you can consider buying a term plan with high coverage. This will ensure that your family gets a lump sum amount if something happens to you.
In your 30s
Most Indians get married or have a child in their 30s and start a new family. It is also the time when you start putting your family’s interest ahead of your own and think about financial planning for the future. You may plan for your child’s future expenses.
So, in terms of choosing the right life insurance policy at this stage, you can buy a term plan. The premium will be relatively affordable as compared to other policies, and you can get high coverage. Alternatively, you can consider purchasing a money-back plan or a return of a premium term plan. This will help you get sufficient coverage, and if you outlive the policy period, you will get the premium back, which is a big plus as you may approach your 40s by the time your policy matures.
In your 40s and 50s
A lot of people in India realise the importance of buying life insurance in their 40s. At this age, even those who avoided buying a policy earlier tend to purchase life insurance. According to IRDA, people in the 40s constitute the most significant chunk of life insurance policyholders in India. While in your 40s, you could be doing well in your professional life, and your children may be still dependent on you financially.
Even if you may have a decent income at this stage, you may feel burdened with taking care of your children’s education needs and parents’ medical expenses. Experts suggest that at this stage, it is better to purchase a life insurance policy that offers both life cover and investments-cum-savings opportunities like ULIP (Unit Linked Insurance Plan).
As you attain your 50s, your children may become financially independent and already think about your retirement. It would be the best time to purchase a retirement life insurance plan with retirement not too far. You may still have enough time to accumulate a decent corpus that you can use post-retirement and manage the expenses during the golden years of your life.
In your 60s
When you are in your 60s, you may be wondering, ‘if it is too late to buy insurance?’ But remember, it is never too late to purchase life insurance. So, if you have not purchased a plan yet, you can do it now.
At this stage, your reason for buying insurance may not be to secure your loved ones’ future but also to make up for the lost income and pay off the dues you may have. This way, you can protect your loved ones from facing the repayment burden.
However, at this stage, the only glitch in getting an insurance cover would be the high premium cost. As you grow old, you are more vulnerable to suffering from illnesses and to cover the risk, the insurance companies charge a high premium.
