What is the right age to buy a Term Insurance Plan?

What is the right age to buy a Term Insurance Plan?

As life has its own way of throwing surprises, death also is an event that can knock at your door at any point of time, without any statutory warning, though; it is also an event that cannot be delayed and nor is denied.

Certainly, death is an event that can cause permanent damage to you and your loved one’s life. When an individual dies, he/she not only drains away family’s emotional health but also their financial capabilities. In such a situation, the family is left in the state of distress without its breadwinner who was the sole earning member/ financial support of the family.

And to take care of times like these, term insurance plans have come into being to provide a financial support for your family at the time of your death.

Term insurance plan is a form of a life insurance product that provides you financial coverage for a specific term. It is a low-cost life insurance plan that pays a lump sum amount to your beneficiary on the account of your death.

Term plans are specifically designed to secure your family’s financial future at the time of your death. The premium for term life insurance plan is low since it only covers financial risk and does not involve any investment component.  Also, the premium for a term insurance remains fixed throughout the tenure of the plan.

The minimum age to buy a term insurance plan is 18 years and the maximum age limit is 75 years or 85yrs depending on the Insurance Company chosen and one can opt for a term of 5 years to 60 years.

But one question that is of utmost importance is that- At what age is it advisable to opt for this type of life insurance product?

So to help you out, we list down a few scenarios considering your age group that can help you choose a term insurance plan at the right age.

In your 20s:

Purchasing a term life insurance policy in your twenties is inexpensive as lower your age, the lesser the premium. Also, at this age, you would have just started with your career and would also have fewer responsibilities. Further, buying a term insurance plan in your 20swould help you to meet your financial obligations such as student loan or a personal loan.

Consider this: If you are a non-smoking 21-year-old male, then the yearly premium for a sum assured of Rs. 1 crore will be Rs. 8,181.

In your 30s:

At this age, people tend to get married and have kids due to which financial responsibilities witnesses a considerable increase. Although, there is a rise in income, other financial obligations such as home loan, car loan, school fees, long-term debts and other economic requirements too are on the verge of elevation making you feel the pressure of being the single earning member of the family as well as having the responsibility of the new members of the house. So if you are a non-smoking 32-year old male, then the premium for a sum assured of 1 crore would be Rs.11,496 on a yearly basis.

 In your 40s:

As you enter your 40s, your long-term debts are partially covered, but with this, responsibilities such as higher education of your kids, your retirement plans and age-related problems too seem to arise. Hence, you need a term plan with higher cover. Thereby, buying a term plan of 2 crores at the age of 43 would cost you a premium of Rs. 18,914 on a yearly basis.

In your 50s:

As you enter your 50s, your children would have started earning and most of your debts would be paid off. But even during this age, you would have certain financial commitments, including children’s marriage, the premium for a health plan, car plan and other liabilities. So even in the 50s, you need to ensure financial protection for your family. So a term plan of 2 crores at the age of 54 would cost you a yearly premium of Rs.39,040.

In your 60s:

In your 60s, insurance companies will surely allow you to buy a term plan, but the premium will be higher and the costmay increase if you have any medical conditions. Also, in this age-group, you would have already retired and would not have any constant source of income.So do you think you really need to buy a term plan at this age as generally your responsibility of getting your child educated and married would be over? Also, you won’t be having any financial obligations by now and who will pay the premium after your retirement, if you don’t have any source of income?

If you are a 62-year-old non-smoking man, then the premium for a sum assured of 1 crore would be Rs. 52,371 on a yearly basis. So it’s advisable to think logically and buy a term plan in your 60s unless you have mounting debts or other financial responsibilities.

Therefore, it’s best to buy a term insurance plan at an early age so that you can cover your financial obligations, child’s education and marriage and safeguard your spouse’s retirement.

A few factors that you need to consider while buying a term plan are your age, your income, number of dependents, your lifestyle and the term of your policy. With this, you also need to opt for a plan from an insurance company that has a good claim settlement ratio, has good services and offers the benefits of riders such as waiver of premium rider, permanent disability rider, critical illness rider, accidental death benefit rider, women critical illness rider and accidental death benefit rider.


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