Term Insurance Age Limit: What Is the Minimum & Maximum Age to Buy a Policy?

What is Term Insurance?

Term insurance is primarily a life insurance policy with a fixed tenure, say 20 years, 30 years, or more. It is considered pure life insurance because the policy provides a death benefit to the nominee if the life assured passes away during the policy term. Term insurance plans typically have no maturity benefit and offer only pure life cover. If the life assured survives the policy tenure, there is no payout.

Note: Under a term return of premium (TROP) policy, the insured receives the total premium paid as a survival benefit upon surviving the policy tenure.

Minimum Age for Term Insurance

If considered in accordance with the rules, most life insurance companies offer term insurance to individuals as young as 18 years. So, anyone aged 18 or older can purchase a term insurance plan. However, it is always best to buy as early as you can. Whether you are in your early 20s or late 40s, it's never too late to purchase financial security for your loved ones in the form of term insurance.

People in their young years often believe term insurance is something people purchase in later phases of life. However, since life can be unpredictable, it is best to act as early as you realise.

Maximum Age for Term Insurance

The maximum age for term insurance actually varies from one insurance company to another. Most life insurance companies have a maximum entry age of up to 65 years. Some insurers may extend the term life insurance age limit till 70 or even 85 years. It depends on the terms and conditions of an insurance provider.

Buying term insurance can be quite meaningful even for people in their 50s. While most people may believe that the 50s or 60s are too old for term insurance, it is still an opportunity to leave a financial legacy behind for your loved ones. So, better late than never. It is always a meaningful decision to prepare financial strength for your loved ones so they can rely on you even when you are no longer around.

The Ideal Age for Term Insurance

Now that we have discussed the minimum and maximum age limit for term insurance, you may want to know the ideal age to buy one. Simply put, term insurance provides coverage for life. So, the earlier you purchase one, the better it is. The ideal age can be the exact time when you realise the purpose and importance of term insurance. So, it is advised to buy as early as you can.

Buying term insurance early has several benefits, like:

Lower Premium

Young people are less likely to have health issues. So, they can get term insurance plans at a lower premium. As you age, the premium continues to increase. Buying early lets you lock in the premium at a lower rate.

Better Coverage

People often look for long-term life insurance plans. So, purchasing a term insurance plan early in life means you can get a longer tenure of coverage.

Tax-Saving

A term plan helps in reducing your taxable income while securing your family’s financial future from an early stage. You can avail tax benefits of up to ₹1.5 lakhs on premium payments under Section 80C of the Income Tax Act of 1961, when you opt for the old tax regime.

Things to Consider While Buying Term Insurance

Since buying term insurance is a serious financial decision, there are certain things you must keep in mind. Some of these are:

Coverage Amount

Choosing the appropriate sum assured is one of the most important decisions. It should be sufficiently high to meet the family's long-term financial needs, including mortgage payments, expenses, children's education, and future aspirations.

Policy Term

The period of your policy should be decided practically. Ideally, you may choose a tenure that covers your working years or until financial debts are paid off. Therefore, choosing the right length of time will ensure your family is supported even if you are no longer there.

Premium Affordability

While it is necessary to have adequate coverage, the premium you are required to pay must also be within your budget. If the premium is too high, it may make it difficult to manage your finances. Choosing one under your budget ensures you make the payments regularly without affecting your lifestyle or financial security.

Claim Settlement Ratio

An insurer's claim settlement ratio is a key indicator of an organisation's stability and reliability. A high ratio indicates that claims are processed effectively and paid without unnecessary delays or complications.

Exclusions

You must also understand the policy exclusions properly. For example, certain diseases, engaging in dangerous activities, or even some specific causes of death may not be covered. Being well-informed about these constraints helps during claim settlement.

To Conclude

Term insurance can be one of the most important financial decisions for any individual. It is something you purchase for the financial well-being of your loved ones when you are no longer around. So, the choice must also be well-planned. This is when Jio Insurance Broking becomes your ideal partner. At Jio Insurance Broking, you can easily compare various term insurance plans to choose the one that best suits your budget and requirements. Understanding the minimum and maximum term insurance age can help you make a better decision.

FAQs