Many financial experts often suggest and reiterate the importance of term insurance. Term insurance is popular because it offers a high scope of financial security in exchange for affordable premium rates. Term insurance is a financial product – a type of life insurance that provides financial coverage to the family members of the breadwinner, i.e., the person who buys the term insurance policy.
The person to buy term insurance is usually the sole or co-income earner of the family looking to protect their family in their absence or aftermath of a death. The financial coverage is in the form of a death benefit that the chosen family members of the buyer of the term insurance plan receive on their unforeseen demise.
However, not everyone is eligible to buy term insurance, and insurers have laid out a specific age for term insurance plans. Read on to find out more about the term insurance plan age limit and how term insurance plans work for different life stages.
What is the Age Limit to Buy Term Insurance?
The term insurance age limit in India usually ranges from 18 years to 65 years of age. 18 years is the entry age for term insurance, and 65 years is the term insurance age limit. The term plan age limit might vary from insurer to insurer, but the general age group is similar around the globe. The age group of 18-65 years exists for term insurance because the age group is considered financially independent to some extent, if not completely.
Because insurers take on the responsibility of providing insurance, the onus of financial risk is on them. They need to be sure that the person buying the term insurance plan is capable of paying for it. To ease the risk of insurance, insurers only let those who are within the range of employment buy term insurance. And those within the 18-65 years of age range fall into the spectrum of financial stability.
However, do not confuse the term plan maximum age and minimum age with the term insurance plan coverage because the coverage is extended to anyone irrespective of age. It is just the purchasing bit that has to be done by those between the ages of 18 to 65 years.
How Does a Term Insurance Plan Work for Different Ages?
Term insurance in your 20s
You might think that you do not need term insurance in your 20s. And while that may work well for you if you have sole responsibility for yourself, it seldom works like that. Many people in their 20s often start to partially or fully shoulder the responsibility of their family, studies, career, and others.
These reasons are why financial experts recommend buying a term insurance plan in your 20s. Because that is when the financial coverage offered is apt and the premium payable is also affordable.
Term insurance in your 30s
Your 30s is when your responsibilities will most likely begin to grow. You might enter into the stages of adulthood that require consistency and dedication, like marriage, raising a family, starting a business, getting more job responsibilities, saving up for a home or vehicle, and the like. At such a foundational time, you would not want to leave your family behind in the eventuality of your passing.
Here is where term insurance can help you. The 30s is also when most people buck up and realise they should put money in some form of insurance or investment, if not term insurance. So the premium rates for a term insurance plan in your 30s will not be very expensive, either.
Term insurance in your 40s
Your 40s are most likely to be the time when your duties as a parent and child will peak. You might have children and parents to look after. Even though households, especially in metropolitans, are becoming dual-income, in some cases, people even have to take care of their spouses.
Goals like buying a home, owning a car or bike, and saving for rainy days/ medical emergencies replace the earlier ones. Despite the nitty-gritty, one thing that remains common is that financial responsibilities grow manifold in one’s 40s. Term insurance at this age is integral to keeping your foundation as strong as ever and having a backup your loved ones can rely on in your absence.
Term insurance in your 50s and 60s
In your 50s, your goals will again change. You might have fulfilled the earlier goals of buying a home, owning a vehicle, or funding your child’s higher education, but what might remain are the pending loans and debts taken to fulfil those goals. The 50s is also the time you start thinking of retirement.
And though term insurance can’t do much for your retirement, it can surely protect the cherished ones in your life from financial turmoil in your unfortunate demise during your golden years. The 50s and 60s are also a time when most people require medical care from time to time.
So, again, the term insurance death benefit might not be of much use here. But term insurance plans come with additional covers/ riders1 that provide that extra layer of protection in life-altering scenarios like an accident, physical disability caused due to an accident, the development of a critical or terminal illness, and so on. You can use the additional rider1 amount to fund your family’s needs while you take your time to recover and get back on your feet.
Term insurance plans clearly specify the term insurance age limit and range. While you can buy term insurance anytime between those ages, it is wise to get it as early in life as possible. That way, you get the best deal at the most affordable prices. You can check out Tata AIA Life insurance for more insight into term insurance and how it benefits each milestone of life.