Best Age to Buy a Term Insurance Plan and Why

Why Age Matters in Term Insurance?

Term insurance premium calculations are based on the mortality risk. When you are young and healthy, the mortality risk is low and hence the lower premium, and vice versa. Buying early saves you insurance costs, which increase as you age.

Recent studies show that younger consumers are skipping life cover or term insurance due to the growing trend of delayed marriage and parenthood choices. Though 91% Indians believe that life insurance coverage is essential, the life insurance ownership rates are coming down over a generation. Gen Z, the youngest generation, have the lowest life insurance ownership rates.

It is crucial to know that a term plan is essential to ensure your future earning potential, protect your future dependents, safety net against your liabilities. Considering the rising health risks, buying term insurance early can help you lock in higher coverage at an ultra-low premium. Risk protection is foundational for successful financial planning and wealth creation.

Here is how buying term insurance varies with age:

Buying Term Insurance in Your 20s

The 20s are the ideal age to buy a Term Insurance Plan cover for any individual. You are starting your career and are in the utmost good health. At this age, if you are planning to take any loan or get married or if your parents are retiring, availing a term insurance gives a financial cushion and peace of mind. You can get higher coverage at a lower premium.

Buying Term Insurance in Your 30s

The 30s are still the right age to buy a Term Insurance Plan cover. Often, people become financially responsible at this age after marriage or having kids. Securing your family against the uncertainties of life and providing them with financial protection becomes essential at this age. Term insurance is still affordable at this age, definitely with a relative hike in premium.

Buying Term Insurance in Your 40s

Buying term insurance in your 40s requires careful evaluation both in terms of coverage and premium, as the underwriting norms tighten with increasing age. However, you can still consider buying term insurance in your early 40s, as you carry the higher responsibilities.

Buying Term Insurance in Your 50s

Buying term insurance at this age can give limited coverage and be expensive. Short-term policies or hybrid products can be a good consideration at this age.

Here is a term insurance cost comparison for the same coverage at different ages:

(Based on ₹1,00,00,000 Sum Assured for a Non-Smoker Male)

• Age 25: The approximate annual premium is ₹9,000.
• Age 35: The approximate annual premium is ₹14,000.
• Age 45: The approximate annual premium increases to ₹33,000.

At Jio Insurance Broking, you can get quotes for term insurance plans from various insurance companies, compare them on the basis of their benefits, features and costs. You can buy a term insurance plan suitable for your needs and affordability.

Benefits of Buying Term Insurance at an Early Age

The following are the benefits of buying term insurance at an early age -typically in your 20s and 30s:

Higher coverage at a lower premium:

When you are young and healthy, you can avail higher coverage at a lower rate of premium, as premiums stay constant throughout the policy term. Also, you can get comprehensive coverage, including various add-ons like accidental death, critical illness or terminal illness rider at a nominal extra cost.

Easy approvals:

Chances of getting approval for comprehensive coverage are higher when you buy early, specifically due to your health profile. Underwriting is also easy to get the desired coverage at favourable terms and rates.

Long-term financial security:

As you buy early, the policy term will be longer, offering long-term financial protection. This can align with your long-term goals, like children’s education, a home loan, etc., while it may be unclear in your 20s.

Things to Consider While Buying Term Insurance

Here are some important things to consider while buying term insurance:

1. Consider your liabilities and dependents. If you don’t have any dependents, you can still buy a Term Insurance Plan cover at a cost affordable for you and can step up the coverage later based on your milestones.
2. Lifestyle habits and health risks need to be considered. These things have an impact on the coverage and cost.
3. Ensure to read the policy terms, scope of coverage and avail necessary riders to ensure you have complete financial protection. Estimate your coverage needs based on estimated future income, debts, financial obligations of long-term and other assets.
4. Read exclusions and the process of claim before buying a term insurance for a smooth settlement of claims

Conclusion

To conclude, buying term insurance as soon as you have financial dependents, sizeable liabilities – typically in your mid 20s and early 30s is ideal. Buying early helps you get a comprehensive and higher coverage at the lowest premium with easy underwriting norms. Protecting your family’s financial future is indispensable. Consider your income, future expenses, liabilities, health risk and affordability to make the right term insurance buying decision.