Financial Planning: Know What Term Insurance Offers To Different Age Groups

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Insurance Agent at Work
Insurance Agent at Work

When you have set off to buy term insurance, there are many factors that come into play and can determine how secured and financially settled your future could be. It is very important that you have a rational approach towards the whole process and do your due diligence when comparing insurers and different term insurance benefits.

An ideal portfolio would consist of the best tools to save money, so invest in instruments where it can grow and yield returns, and invest in a term insurance plan that will take care of your family’s needs in the future, even in your absence.

Insurance agent services
Insurance agent services

Know What Term Insurance Offers To Different Age Groups

If you are thinking about when to buy a term insurance policy, then here are the different benefits you can enjoy based on the age you buy your policy:

  1. In your 20’s

This would probably be one of the best times to buy a term insurance policy as you would be in a healthier state with lesser or no illness/diseases. Moreover, responsibilities are often lesser at this age, so paying premiums doesn’t seem like a burden either and to top it off, the younger you are when you buy a policy, the lesser your premiums will be.

  • In your 30’s

Usually, this is the age bracket in which most individuals get married and settle down or plan for children. Of course, it is a crucial time in every individual’s life as responsibilities start to hone in, but it is also an ideal time to buy a term insurance policy if you haven’t already, as you will still be able to enjoy lower premiums.

  • In your 40’s

While this is not an ideal time to buy a term policy, if you have waited this long, it is best to consider your family’s current and future expenses, liabilities, and financial needs and then opt for a higher coverage amount. Remember to consider expenses for your children’s education and your parents’ retirement as well, as you will want to ensure that they are financially covered in your absence.

  • In your 50’s

The biggest disadvantage you will face if you buy a term policy at this stage is the hefty premiums as you may not be as fit and in that good a shape as you were in your twenties and thirties. However, another disadvantage is the sum assured as you may no be able to get a very high sum assured once you have already entered your fifties. Moreover, if you smoke or drink regularly, then your premiums could very well be sky-high.

Ideally, the sooner you buy a term life insurance policy, the better. At an earlier age, the premium is often lower because the individual is healthier and younger (in their 20’s and 30’s), which also means that they still get higher coverage. In addition, insurance providers often have great offers for individuals in their 20s, which gives them many options to compare and choose from.

Talking to insurance agent
Talking to insurance agent

Image Courtesy: Shutterstock

Keep These Points In Mind To Enjoy Your Insurance Better

Here are some of the important points to keep in mind if you want to enjoy maximum term insurance benefits:

  • Increasing age invites higher premiums, so buy term insurance early in life if you want to enjoy smaller premiums.
  • Opt for a term insurance policy that has an option to extend your policy term and offer increased coverage.
  • Smokers end up paying higher term insurance premiums, irrespective of the age groups, so it would be ideal to quit smoking and wait a while before buying a term life insurance policy.
  • Remember to share all your health-related details, lifestyle habits, and illnesses (if any) while buying the policy, as tampering with the information or misleading the insurer can lead to a breach of the contract entirely.
  • Add-on riders are there to add more features to your existing policy but not compulsory
  • It is advisable to opt for a yearly premium when it comes to term insurance as opposed to one-time premium payment.

You can also enjoy tax exemptions under section 80C of the Income Tax Act for the premiums you pay every year. To understand it better, you can use the income tax calculator and figure out your tax savings at the end of every financial year, as you can save up to Rs. 1,50,000 in tax with the term life insurance policy.

Investing in a term insurance plan at an early age is a great way of securing your present and your family’s future by making them financially independent even in your absence. Do your due diligence online, compare policies from different insurers and buy one today.