Term Insurance Age Limit

A term plan is one of the best life insurance policies that safeguard your family’s financial future from unexpected] events. It gives your family the death benefit in a lump sum if something happens to you. Your family can then use the pay-out to cover their regular and future expenses like child education fees, EMI payments, medical expenses etc.

While you may know that the term insurance age limit is critical for all and a must-have in your financial portfolio, you may feel confused about the right age to buy one. Do insurance companies have any term insurance age limit for purchasing a term plan? We’ll answer both of these questions in this blog.

With regards to the right age for buying a term insurance policy, financial experts recommend buying it early. Some experts say you must purchase a term plan on the day when you get your first paycheque. You can buy the policy at an affordable premium with high coverage when you are young and healthy.

Let us look at the age limit for term insurance and the kind of term plans you need in every age group.

Term Insurance Age Limit

Most insurance companies provide term insurance plans for people from 18 years to 65 years of age. Anyone from 18 to 65 years of age can buy term insurance. Term insurance tenure can last till 99 years, so even if you’re 65 years of age, you can buy term insurance that lasts till you’re 99 years old.

Term Plans for Different Age Groups

It is always a good idea to buy term insurance as early as possible, but that is not practically possible for everyone. Some buy it in their 30s; others tend to avoid buying a term plan until they are in their 40s or 50s. We’ve given a list of scenarios categorised by age below so that you can approximate what kind of term plan you need at your current age.

For Ages 20 to 30 years

If you’re in your 20s, you’re most likely just starting your career and are unmarried with no significant debt and not many dependents. In this case, you can surely buy term insurance, but you may not need a huge life cover.

You can opt for a 50 lakh cover with a term of 30 or 40 years. You’ll need to pay premiums ranging from Rs 4000-6000 per year, which is quite affordable. You must remember that your financial liabilities and dependents will increase in the future, and your life cover should factor that in.

For Age 30 to 40 Years

If you’re in your 30s, you’re most likely married and have some liabilities like loans and dependents as well. In this scenario, you must decide how much your dependents would need in the future if you’re not with them. Factoring in future expenses and type of lifestyle usually gives a figure of ₹75 lakh to 1 crore. So opt for a similar life cover when buying term insurance.

For ages 40 to 50 years

In your 40s, you’ll have much more responsibilities as well as financial liabilities. Your children would grow bigger and require higher education, marriage expenses etc. Hence when buying term insurance, you would need at least ₹1 crore as a life cover. The premiums may be slightly higher when you purchase term insurance at this age.

For Age 50 and above,

Even when you’re 50 years of age, you can still buy term insurance and protect your loved ones financially. But remember that premiums at this age may be higher. Furthermore, you can also get additional riders like critical illness riders, that can further help you in times of financial need.

Thus, term insurance is available for all age groups. So whatever age bracket you’re in now, it’s never too late. Get term insurance and provide financial protection to your loved ones.

Why should you buy a term insurance plan at an early age?

• Premiums are low
• The term is longer
• You can increase your life cover at a lower cost
• You can buy online easily
• Lower premiums leave room for other investments in the future
• Tax Benefits

Benefits of Buying Term Insurance Plans from Kotak Life

1. With a small additional cost, convertible to whole life:

The assured may use this option of convertibility if they want to change to an endowment policy and start a savings fund while maintaining their risk coverage.

2. Premium refunds:

The usual word policy comes in a few different forms. The option to have all premiums returned when the insurance matures is available for slightly higher premiums. So, if the guaranteed lives longer than the policy allow, he at least receives the money he paid to the insurance firm back.

3. Income tax advantages:

According to Section 80(C) of the Income Tax Act, term insurance premium payments are deductible, while Section 10 of the same law exempts the death benefit from taxation (10D). Thus, the assured can plan his tax responsibility by purchasing a term insurance policy, and in the event of his passing, his dependents will receive the money tax-free.

4. Investigating more, more lucrative investment options

A savvy investor with a higher risk tolerance can do this. They prefer to invest in vehicles that are tied to the market, such as debt, equity, and mutual funds, rather than locking in larger sums of premium for endowment policies, which offer returns at a moderate rate. They can ensure their family’s financial security at the lowest feasible cost by purchasing term insurance.

5. Options for extending and renewing coverage as well as for adding other riders:

The conditions of term insurance can be changed to meet the buyer’s needs by adding particular riders that cover the possibility of long-term illness or permanent incapacity. This can be done when purchasing the insurance policy. By extending the term, either during the policy’s term or at the time of its expiration, the risk covered under the insurance may also be improved. Based on the assured’s life status and insurance demands, the insurance company will impose higher premiums in both situations.

FAQs – Term Insurance Age Limit