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Need assistance in choosing the right insurance plan? Get a call from our Expert.

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Should You Get Term Plan Coverage till 100 Years of Age?

While we may have our own life plans and goals set, we can never predict what life throws our way. Individuals are slowly recognising these factors and have understood the importance of ensuring their family's financial safety. When you secure your family’s financial future, you can live stress-free, knowing that your family will not be affected financially if something happens to you.
 

Along with this, the financial plan set by you will help the family deal with different liabilities during a tough time. One of the most preferred ways individuals protect their family is through a life insurance policy. These policies will provide the policyholder and their beneficiaries with monetary support in an unfortunate event. 
 

Among the many insurance policies available in the market, a term insurance plan is one of the apt plans for insurance coverage. Term insurance plans are known to provide more insurance coverage compared to the other plans in the market. Along with this, these plans come at extremely affordable premium costs. If you wish to live your life in peace without worrying about your family's financial safety, getting a term plan is one of the best decisions. 
 

 

How do term plans work?
 

In a term life insurance plan, the policyholder will have to pay a specific premium amount for a pre-determined tenure. Making these premium payments ensure that the policy stays in effect and can be used when required. Through these plans, the policyholder gets insurance coverage for a specified tenure. If they pass away during the plan's term, their beneficiaries will get the sum assured as a death benefit. However, if the policyholder survives the policy's tenure, there are no survival/maturity benefits associated with a regular term plan. 
 

 

Reasons why you should get a term insurance coverage plan:
 
  1. Premium amount: As there is no other component in term plans other than a simple life cover, the premium for term plans is lesser than other insurance plans. Term plans are quite affordable in that sense. 
     

  2. Flexibe: These plans are flexible. You can choose the policy term and the premium payment terms as per your needs. 
     

  3. Ensures financial security: These plans will help your beneficiaries deal with different financial liabilities and can be of great assistance when it comes to securing their future goals and commitments.
     

  4. Tax# Benefits: Under Section 80C of the Income Tax Act,  the term plan premiums are eligible for tax# deductions while the death benefit is tax-free under Section 10(10D), as per prevailing tax laws.
     

     

Should you opt for a term plan up to 100 years of age?
 

Getting a plan that offers protection up to 100 years of age means getting whole life coverage from the insurer, which offers you coverage till you attain 100 years of age.
 

Here are three reasons why you can opt for a term insurance plan:
 

  1. If you have liabilities or dependents even after retirement:
    Most people plan their major liabilities in a way that they will be paid off before retirement. However, there might be certain circumstances where your liabilities can extend even beyond 60-65 years of age. You may have taken a loan later in life that needs repayment, or you may need to provide for a dependent spouse or sibling. There might be cases where you need to ensure a payout for your spouse in your absence. In all these cases, opting for term plan coverage until 100 years of age is great.
     

  2. If you choose to earn beyond your retirement years:
    Due to certain circumstances or by plain choice, you may decide to continue working and earning beyond the average retirement age. In these cases, if your spouse or any member of your family is dependent on your monthly income, then it is better to secure an income replacement with a term insurance plan.
     

  3. If you wish to leave behind a large financial legacy for your loved ones:
    Many people plan to have term life coverage to provide a financial legacy for their families. You can choose a whole life term plan cover which will pay a huge sum assured to your family in case of your demise, assuring an extensive financial corpus for your loved ones.

Along with this, having term insurance coverage for more than 100 years will protect you from paying extra premiums, and the policyholder gets whole life coverage without any medical test. 
 

 

How should you determine the tenure of your term life insurance plan?
 

To determine the tenure you must get with your term plan coverage will depend on different factors like:
 

  1. Age: The tenure for your term plan will heavily depend on the policyholder's age. For instance, if the policyholder is young, they can opt for a longer tenure. However, as your age increases, the tenure you can get through the plan will decrease. 
     

  2. Liabilities: If the policyholder has any outstanding debt obligations, their term insurance cover must include their debt obligations. Along with this, the plan's tenure must be equal to or more than the balance EMI duration. Thus, if the policyholder passes away, their family won't have to worry about their outstanding liabilities.
     

  3. Financial objectives: When you're getting a term plan for your family, you must factor in the various life goals your family wishes to achieve. You can plan the term plan's duration after factoring in these milestones. So, if you pass away, your family will not have to worry about the financial aspect of dealing with these important milestones in their life. 
     

  4. Maximise duration: It is advised that you must opt for the maximum term insurance tenure, which is available for your age and risk profile. Hence, if a 30-year-old is getting term insurance for the next 30 years of their life, they or must opt for a 40-year tenure in their plan. This is because the financials can be uncertain. 

Among these factors, the plan's affordability will also play an important part. If an individual has opted for a long tenure, their premium amount will be less. Therefore, they must consider their current savings and cash flow and make a viable decision. 
 

 

Maha Raksha Supreme by Tata AIA with whole life cover 
 

With the Tata AIA Life Insurance Maha Raksha Supreme Non-Linked Non-Participating, Individual Life Insurance Pure Risk Premium Product (UIN: 110N102V04), offered by Tata AIA Life Insurance, policyholders can ensure their loved ones never face any financial difficulty and achieve all their dreams. It's a customisable term insurance plan that provides the policyholder whole life coverage up to 100 years of age, fulfilling all of their family's needs and requirements.
 

This plan also comes with an in-built Payout Accelerator benefit that offers 50% of the sum assured if the policyholder gets diagnosed with a terminal illness. Policyholders can also increase the coverage from the plan during major life events with the 'Life Stage Plus' option. They can also enjoy a discount on premiums when they opt for an enhanced sum assured. Likewise, women policyholders and non-smokers also get discounts on their premiums for the policy.
 

 

Summing up
 

A term insurance plan is an optimal plan that provides the policyholder with decent coverage. Many individuals opt for purchasing a term plan till 100 years of coverage. It can be quite beneficial, as the policyholders can ensure their beneficiaries get the required coverage and secure their future in case of an unexpected eventuality.
 

L&C/Advt/2023/Mar/1056

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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Disclaimer

  • Insurance cover is available under the product.

  • The products are underwritten by Tata AIA Life Insurance Company Ltd.

  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.

  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

  • Please know the associated risks and the applicable charges, from your insurance agent or the Intermediary or policy document issued by the insurance company.

  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.

  • #Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.