In recent times, a countless number of life insurance policies have been flooding the market. They all serve one purpose - to safeguard people and their dear ones against the uncertainties of life. Today, many of these policies are further customised to cater to the multifarious needs of people.
Amongst the broad spectrum of life insurance products, term insurance plans potentially serve as the most affordable and intelligible ones. These plans offer relatively lower premiums for a higher sum assured.
A term plan works on the basic premise of providing pure life cover to the nominees of the insured for a specific tenure. In case of the policyholder’s untimely demise within the policy’s tenure, the sum assured is instantly disbursed to the nominees. However, no payout or maturity benefits are rendered to the nominees if the policyholder outlives the policy’s tenure.
Even so, when you buy term insurance, it immediately instils a sense of security in you and your loved ones. In other words, you get a chance to secure the most important years of your life in the most economical and prudent manner. And your loved ones get to avail a large sum assured which can possibly suffice all their future needs. Not to mention, the premiums paid on these plans are exempted from tax deductions.
Popular notion suggests that it is best to invest in a term plan early, as it calls for numerous benefits. So, to better understand and decide the best age bracket to buy term insurance, let’s look at the different factors involved
The 20s
Typically, this is when an individual enters his/her professional realm and is likely to be debt-free. With fewer family responsibilities on hand, he/she is capable of purchasing a term plan and paying its inexpensive premiums. It is worth mentioning that the premium amount is usually lower for a younger individual because the associated life-risks are far lesser than an older individual’s.
The 30s
By this juncture in life, an individual is likely to have started a family. She/he may have numerous financial responsibilities and expenditures such as vehicle loan, home loan, etc. Given all these responsibilities, a term plan becomes a near-necessity to secure the future of any dependents. Thereby, the term insurance premium tends to increase when you plan to take it in your 30’s.
The 40s
During the 40’s, an individual may tend to undertake much bigger responsibilities such as his child’s higher education, his very own retirement preparation, and so on. Along with these expenses, increases the possibility of age-related illnesses. As such, the premium tends to escalate further.
The 50s
By the time an individual reaches his 50’s s/he may not be the sole breadwinner for his family but would still need financial stability. Along with taking care of the family, he may also be concerned about his retirement and health. Considering these aspects, the premium can spike all the more for this age bracket.
It is never too late to procure a term insurance. However, after carefully analyzing one’s responsibilities and expenditures with the help of a term insurance calculator, one can definitely opt for a suitable term plan early and secure a strong financial future.
