Roadmap to Insurance: Life Insurance at Every Age

"How much insurance do I need?" is a common question among those looking to invest in a term policy. Many underestimate the role of age in determining the right insurance amount for themselves and their loved ones. Before you buy term insurance, it is important to know how insurance needs vary by age. 

Age: A Key Determining Factor in Term Insurance

A term insurance plan allows you to secure your family's future and protect them from financial burden. If the breadwinner meets an untimely death or suffers from a critical illness that affects their earning ability, it can cause financial distress to survivors.

The amount of term insurance you need will depends on how much capital your dependants will need at each life stage. These requirements keep evolving with age. For example, a 40-year-old will have more dependants with multiple needs than a 20-year-old. Given below is an explanation of the age-wise life insurance policy neede.

Term Insurance Needs by Age Groups

Broadly, people buying term insurance fall into five age groups. They can be categorized as people in their 20s, 30s, 40s, 50s, and beyond 60s. We look at the insurance needs of each of these age groups.

The 20s: Benefit from Lower Premiums

Many young individuals in their 20s believe they do not need life insurance. They think it is too early to purchase a policy because they do not have dependants. But it is never too early to get insured.

Purchasing life insurance in your 20s offers several advantages. You pay lower premium rates when you are young. When you start early, you build a larger corpus over the policy term. You can also explore investment options with higher risk. Starting a retirement plan at this age helps you develop savings habits for the future.

When you buy life insurance in your 20s, consider these factors. Choose a term plan instead of whole life policies. Select a flexible plan that lets you change the mode or coverage. Look for a policy that includes a waiver of premium rider. Additionally, you can use a term plan calculator to estimate your premium.  

The 30s: New Financial Obligations Allow Future Planning

Many people in India get married or have children during their 30s. They start new families and begin thinking about their family's needs before their own needs. Financial planning for the future becomes important. Many individuals plan for their children's future expenses at this stage.
 

A term plan works well at this age. The premium remains relatively affordable, and you receive high coverage. You can also consider a buying a term insurance with a return of premium. If you survive the policy period, you receive your premium back. This may help as you move into your 40s when your policy matures.

The 40s: Ideal Time to Start Retirement Planning

By the time you reach 40 years or older, you may have repaid most of your debts. These debts include student loans, car loans, and mortgages. However, other obligations remain. You need to plan for retirement. You may have home loans. You must save for your child's education. Your term insurance protects your family's future and goals. Consider your current commitments and future commitments. Your term insurance helps ensure these needs are met.

The 50s: Protect Dependants from Financial Hardships

When you reach 50 years or older, term insurance premiums increase significantly. However, experts still recommend buying term insurance at this age in India.
 

As you grow older, medical expenses may arise. You need to save for these costs. Your child may prepare for higher education. You may want to live in your dream home. If you pass away unexpectedly, your term insurance amount covers these financial commitments so that your family does not face a financial burden.
 

The term plan also provides protection against expenses for certain critical illnesses. These illnesses can also impact your savings. However, term insurance offers protection against such situations.

Post 60s: Never Too Late to Get Insured

At 60, individuals are either close to retirement or have already retired. In India, the maximum age limit to purchase a life insurance policy is 65 years. As long as individuals are within the term insurance entry age limit, the policy can be purchased.
 

Term insurance can cover individuals for the duration of their choice. Some policies offer coverage till 99 years. Hence, a life insurance policy can still be taken in the 60s.
 

Term plans are often simple and accessible options for obtaining life cover, whether as your main plan or as additional protection. Before choosing a policy, use a premium calculator to understand the cost. Also, understand the inclusions and exclusions of the plan to make an informed decision.

Conclusion

While insurance needs vary by age, they can also differ based on individual situations, and there may be exceptions. Individuals in late 30s may have fewer financial obligations, requiring lower coverage. Those in 50s may still have financial commitments, requiring higher insurance. Premiums payable are lower for younger applicants with fewer health risks. Moreover, it's never too late to take insurance. Tata AIA Life Insurance's term insurance plans are available for people of all age groups. The maximum entry age for life insurance goes up to 100 for certain policies. Get in touch with Tata AIA Life Insurance's advisors to find the appropriate insurance plan for your age group.