Term Insurance Age Limit – Term Plan for All Age Groups

• 11th Oct 2021
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A term plan is one of the best life insurance policies that safeguard your family’s financial future from unexpected events. It provides your family with 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 term insurance 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 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 at an early age. 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 Age 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 keep in mind 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, 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 Rs. 75 lakh to 1 crore. So opt for a similar life cover when buying term insurance.

For Age 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 Rs. 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.

- A Consumer Education Initiative series by Kotak Life