Understand the Right Age to buy a Term Insurance Plan

 Understand the Right Age to buy a Term Insurance Plan

A term insurance plan is an insurance plan that provides you with a life cover that your beneficiary/nominee will receive upon your unfortunate demise. Term insurance plans are one of the very few policies that are available in India for a sum assured of Rs. 1 crore or more. Term insurance plans offer the benefit of you paying conservative or moderate premiums and getting a huge sum assured in the bargain for the same. This makes term insurance plans an affordable plan. 

The people eligible to purchase a term insurance plan fall under the age group of 18 to 65 years. However, the ideal age to buy a term insurance plan is the 20s, especially once; you are earning a stable regular income. When you get a term insurance plan very early on in your 20s, you have an added advantage of health and age on your side to help you get away with a lower rate of premiums. Especially, with research from gender studies supporting that women lead a less stressed life and live longer than men, allowing women to get lower and better premium offerings from insurance service providers. Like most insurance products, the rate of premium and the premium amount rises with the increasing sum assured amount. 

One of the key factors that determine your premium amount is the lifestyle choices that you make. For example, an individual who smokes will be paying more premium than someone who is a non-smoker. Even the duration affects your premiums, the longer the duration, higher the premium. Usually, the range of the policy ranges from 5 to 40 years or until the individual reaches the age of 99 years. 

Let us understand what the right age to buy a term insurance plan is: 

  1. Anyone that falls in the age group of 18 to 65 can opt for term insurance. However, the 20s is the age when it is a good time to get into the insurance market and plan for your family’s future.
  2. It is a fact that most people land their first jobs in their 20s and start earning a basic amount and their stable incomes; they have relatively lower incomes and lower expenses as they are not pressured with responsibility. With dependent family members to handle now, a term plan offers an affordable solution in case of the insured’s sudden death. As the product comes with a high sum assured amount with low premiums, term insurance is a good option right at the start of your career.
  3. The first preference of insurance providers is young and healthy individuals when it comes to providing insurance. People starting out their careers have a stable income and are healthy. Hence, on an overall basis, they tend to enjoy lower premiums than their older counterparts. 
  4. It makes sense to opt for online term insurancewhich means you will be buying directly from the insurance provider. This leads to savings in processing costs and broker commission, the benefit of which is ultimately passed on to you in the form of lower premiums.

Paul Watson