A term insurance policy is a death benefit policy that provides life cover to the insured against the risk of his/her untimely death during the policy term. However, there are still uncertainties over the best time to acquire a Life Insurance Term Plan as it may vary from person to person, based on their family and financial situations. Although the policy can be purchased anytime during one’s professional career, it has a unique meaning when bought at different ages due to the changing lifestyle and financial goals of a person. Here’s a look at what type of insurances might be best suited for your specific needs across various age groups.
Why should you consider buying a Term Insurance policy in your 20s?
When it comes to buying a term insurance policy, the younger you are, the better. While most people graduate and get new jobs in their 20s, some might have educational loans that need to be paid off. During this phase, salaries are relatively low as well and taking an affordable level term plan is ideal. If something were to happen to you, the entire burden of re-paying the education loan may fall on your parents in your absence. Here, the big bonus is that you will pay the cheapest term insurance plan premium since the risk to the insured’s life is low. Young people can also opt for a return of premium plan if they don’t have to pay off a student loan. This way, the policyholder has a maturity benefit, wherein the premiums are returned to the insurant if he/she survives till the maturity of the policy.
Advantages of purchasing Term Insurance in your 30s
While your income will rise during your 30s, this exciting decade is also the time when most people get married, have kids, buy a car, and enjoy quality time with their family. At this time, people start planning for the future of their children while also worrying about financial obligations such as home loans, auto loans, and other long-term commitments as well. It makes perfect sense to modify the policy to a decreasing term plan in this case if the policyholder has taken a huge loan. The term insurance may be used for these responsibilities and it can also provide financial stability towards the family in the event of the policyholder’s untimely demise.
What type of Term Insurance should you buy in your 40s?
Most people are likely to have paid off their car and home loans by the time they hit their 40s but there are still other major responsibilities for a person during that period. Some of them include providing for children’s higher education, retirement planning and paying for the medical care of your parents. Level term plans are preferable at this stage, but some people may also opt for an increased term plan if they are more settled. In that case, one can opt to increase the sum assured at annual frequency during the plan period while keeping the premiums constant. However, the premiums of this plan will be different from that of level term plans.
Should you buy Term Insurance after you cross 50?
People crossing the age of 50 are slowly creeping towards their retirement. Hence, term plans with riders are the most appropriate policies for people who fall under that category. In this unique plan, the policyholder can buy riders by paying a small additional premium. It is also advisable to buy a term plan in your 50s if you are the sole breadwinner of your family and have huge financial debts to pay off.
With the abundance of term insurance policies in the market, each one has its own set of advantages and disadvantages. Therefore, you must choose your term insurance plan carefully to meet your own needs.
What is the Term Insurance age limit?
A term insurance policy can be purchased from anywhere in the range of 18 to 65 years of age and you can opt for coverage until the age of 99.