When to Buy Term insurance?

As much as one may deny it, death is still an inevitable stage of life. Irrespective of the age or cause of death, one thing that remains same in all the cases is the distress that it leaves behind for the family members and acquaintances of the deceased. Death is more devastating in cases where the deceased happens to be the breadwinner of the household. What’s left is a huge economic burden that must be borne by other members.

Term insurance – Not an Option but a Need

Term insurance refers to a conventional form of life insurance, or as the seasoned ones would say, pure life insurance, where the policy covers the insured for a death benefit – a lump sum which his/her family would get in case of death. In insurance speak, term insurance provides coverage to an individual for a pre-determined time period and offers the sum assured to the nominee(s) in case the policyholder passes away before the maturity of the plan.

Life being as unpredictable as it is, keeps throwing hardships in your way, and that is precisely why purchasing a term insurance can help you achieve a sense of security. Policyholders can rest assured as their families will have something to fall back upon even when they themselves are not around.

There can be many other advantages of buying a term insurance. For instance, these are more feasible than endowment policies or cash value policies as they do not have a savings component attached to them. One can easily opt out of a term insurance. In addition, such plans can be either renewable (can be renewed before completion of the term) or convertible (can be converted to endowment policy through the payment of extra premium).

Demographics in India

Despite being one of the most populous countries in the world, India loses a good number of people to diseases and accidents every year. Around 1214 road crashes occur in the nation on a daily basis and one individual dies in every four minutes on the roads every day. The percentage of people dying as a result of road accidents is higher in metropolises such as Delhi and Chennai.

There is a wide gap in between the rural and urban population in terms of availability of healthcare facilities. And around 72.2% of the Indian population still resides in rural areas. Cardiovascular ailments claim about 24.8% lives in rural and urban areas collectively.  All these facts make term life insurance a pressing need for the Indian population.

The right age for purchasing term insurance in India

Regardless of the advantages that term insurance comes along with, it is not a standard-fit kind of product. Basically, age is an important factor to consider when buying any life insurance as the premium tends to vary with a difference in age of the policyholder.

This gives rise to an important question which is – What is the right age to buy a term insurance?

A general fact associated with the purchase of term insurance is that the sooner you buy one, the better it is. Life can take unexpected turns at any point of time and having a term life insurance at hand is a means of keeping you and your family prepared to meet any eventuality.

However, to help you answer the question better, here is an outline on purchasing term insurance plans at various ages –

The 20s:

Twenties is the time of life when people are striving to make a career. As young professionals at the beginning of your career, your responsibilities in life are few and you have ample opportunities to save. But the most important reason for you to purchase a term insurance in your twenties should be because it is far more affordable now than it will be at some later stage of your life. In case any mishaps were to take place, the term insurance can help your family meet their expenses or pay for your debts like an education loan.

The 30s:

Individuals in their thirties generally tend to be family men or plan towards starting a family. It is that age where your responsibilities are growing and most probably so does your income. You might also opt for various loans to meet your newly risen needs such as a house, car etc.

If anything were to happen to you at this stage of your life, all such investments and debts could completely break your family. A term insurance plan in the thirties therefore seems like a good way to avoid any misfortunes.

The 40s:

At this stage of your life, you are quite burdened with accountabilities. You have to run a family, meet the educational needs of your children and above all this is also the age when you may begun contracting illnesses or health issues more frequently than before.

One thing that is certain with respect to purchasing term insurance at this age is that it may not come as cheap for you now as it would have some years prior. However, this is also that period when you and your family need protection more than ever.

Any Later:

Opting for a term insurance plan in your 50s is not as smart a step, but there are cases that might call for such an investment. These cases could be when you have spouse or kids dependent on your income, you have a lot of debt, or when you are the sole source of income at your home and so on. Among the few things that you should consider when investing in term insurance at this period of your life, the plan cover is the most pertinent one as you must ensure that it is adequate enough to provide for your family’s needs, the tenure of the plan etc.

Different individuals may have different needs and varying financial situations, and hence no age may be too early or too late to purchase a term insurance plan. But all said and done, it is advised that you go for it sooner rather than later to avoid any extra expenses.

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