An ideal, pure life insurance cover with all the features you need, especially if you want your family to remain financially sound after your demise, is term insurance. This life insurance plan ensures your family the support they require. Hence, every insurance company offers a wide range of term insurance plans for its investors. These policies and plans are customized to suit the requirements of different individuals.
But, the question that prevails on everyone’s mind is - when should you buy a term life insurance policy? Many potential investors are unaware of the benefits of early investments in term plans, and thereby, remain confused about the right age to buy an online term policy.
The earlier you begin investing in a term policy, the better it is. If you invest in a good term plan at a young age, probably in your 20s, the term policy premium outflow is lesser.
An informed policyholder puts their money early in term life insurance since that is the right time to buy term plans. Such policyholders focus on reaping the maximum benefits out of a term plan. Buying a term plan at a young age is better because you suffer from lesser diseases. As you age, you start seeing the ugly face of lifestyle diseases, and your premium increases.
What is the Apt Time to Buy Term Life Insurance?
You can buy term plans at different stages of your life. Let’s discuss these to help you get a fair idea of your term insurance coverage and when it is the apt time to buy the same.
- The Early 20s
Youngsters in their 20s are either in college or starting their careers. They are young, healthy, and vibrant. They do not consider saving for the future, setting financial goals, and planning retirement. Moreover, when they come across an online term policy, they postpone the idea of purchasing insurance or ignore it completely. However, it is best to start early. Their expenses are less, and they can seek to build a financial cushion for their future.
Your early 20s are the right age to buy a term life insurance policy because it is extremely affordable and helps you start saving on tax* from the moment you start earning.
- Mid/the Late 20s
At this time, you have either started or are all set to enter into a new phase of your life. Newlyweds consider this as a perfect time to start investing and creating good financial backing for the family. However, it is essential to understand that, at this time, you will require more term insurance coverage as opposed to your earlier investments to ensure optimum financial protection for your spouse and children. If you have availed of any loans or credit facilities for a house or a car, make sure to account for the outstanding loan amount in your term insurance coverage.
Reasons to buy a term plan in your 20s
- Lesser premiums at a young age: One of the important factors to consider when you buy a term policy is that the earlier you buy it, the lesser the premium you have to pay.
- Easy purchase: Purchasing a term plan does not require too much effort. Many insurance companies even let you buy an online term policy. You can easily look at the features and the offerings of the term plan before making the purchase. Term insurance calculators and other online tools further make it easier for you to make an informed decision.
- Stay protected for longer: When you buy a term plan in your 20s, it provides financial security for a longer period. You have the option of choosing a policy tenure of 20 to 25 years. The plan ensures the financial security of you and your loved ones and ensures your protection against a nominal premium paid to the insurance provider.
- Dependents cared for even in your absence: People in their 20s do not have dependents. However, in case you are the only earning member of your family, a term plan can help to secure your loved one’s future after your death. The term plan payout helps them meet daily expenses and also take care of other loans and liabilities that you might have. Investing in a term plan at an early age ensures peace of mind as you know that your family will be taken care of after you.
- Tax* benefits: Tax* savings is another vital advantage of saving in term insurance plans apart from the protection of your family from the uncertainties of life. As per Section 80(C) of the Income Tax Act, 1961, the policy premium amount is tax*-deductible to a maximum of ₹1.5 Lakh. Therefore, if you save in term life insurance at an early age, you can save enjoy more tax* savings.
How Long Should You Hold a Term Life Insurance Plan?
When you purchase term life insurance, it is suggested that you check the duration of the plans. A term policy with a longer duration is much better than a shorter one. Long-term plans can safeguard you and your family till your retirement.
In India, the normal retirement age is around 60 to 65. You can take this age as the benchmark to find plans that provide coverage for this duration.
In today’s times, several private financial institutions and banks offer term life insurance plans. The term policy premium for each of these plans is determined by several factors. Thus, you must always analyze all the factors like your age, income, debts, liabilities, expenses, and plan coverage before investing in a term plan.
You can purchase Tata AIA term plans online. Our term plans offer flexibility on the payout and choice between income, or lump sum, or both. The Life Stage option allows you to increase cover at important milestones. Moreover, the term plan offers benefits for women with lesser premium rates.