Term insurance is one of the most important financial needs in today’s world. As soon as you start earning and taking up some of the financial responsibilities in your family, you should plan towards opting for a life insurance policy.
Consider a situation wherein you’re supposedly the oldest in your family, and you have to look after your two younger siblings, in such a situation you’d need term life insurance to cater towards their education, health, and other basic requirements. Also, for your much-needed assistance during unwanted situations, a term life insurance should be a must have.
In this article, we will take a closer look at what the best age for buying a life insurance policy is.
When should you ideally be getting a Life Insurance Policy?
It is always recommended to purchase a term life insurance policy as early as possible in your life, at and after the age of 18, to enjoy various benefits like low premium rates, high assured sum and flexibility, and so on.
In this context, let’s take a look at when you should be ideally getting a life insurance policy, and what its various benefits are.
What is the age limit for term Life Insurance?
The minimum age limit for term life insurance is 18 years. On the other hand, the maximum age limit to purchase a term life insurance plan is set at 65 years. However, it is very important to understand that the term life insurance age limit isn’t one size fits all.
Plans differ in how old they allow applicants to be for term life insurance, but most fall between the ages of 18 and 65s. Furthermore, there’s a type of term life insurance policy, known as the senior citizen term insurance, whose coverage can be extended beyond 65 years of age.
Benefits of Term Life Insurance at Different Ages
The term insurance policy in your 20s- Can provide various benefits like covering your education loans, and other relevant loans, even in your absence without putting your family under a lot of stress. s
The term insurance policy in your 30s- Can help you provide a more secure financial life to your family in your 30s when you’re likely to get married, have children, and increase your responsibilities and the dependency of everyone in your family on you. At this point, such a policy ensures that your children and spouse won’t face any financial hardships in your absence.
The term insurance policy in your 40s- Can help your children meet their educational and academic goals even in your absence, owing to the fact that by this age your children would certainly be heading towards higher education which is quite expensive in today’s world.
The term insurance policy above your 50s- Can provide you with a rider-like critical illness protection that’ll seek to cover you against critical illnesses, which is quite common at this age. Furthermore, this is the time when your children are trying to be financially independent and might require your support at times, thereby increasing your total expenditure.
Why should you opt for a Term Life Insurance Policy at an Early Age?
You can purchase a term life insurance policy much later in your life too, but the benefits of purchasing it as early as possible can be substantial. Here are some of the reasons owing to which it is recommended that you obtain a term life insurance policy at an early age.
Flexibility
When you buy a term life insurance policy at an early age, it provides you with substantial protection against various eventualities and the flexibility to alter your term plan as and when needed by the addition of riders, increase of the assured sum, and other relevant features.
High assured sum
When you invest in term insurance at a young age, you will be able to opt for a significantly higher assured sum. One of the most prominent benefits of purchasing term insurance early is that your payable premium tends to be considerably lower. This will allow you to get higher coverage at a relatively affordable price.
Financial stability
Our lives are inherently uncertain, and unexpected incidents can evidently disrupt our financial plans. When you invest in a term life insurance policy at an early age, it creates an assured safety net for your family. This also ensures that they’re not burdened with any financial hardships in case you’re no longer there to provide for them.
Financial discipline
A term life insurance policy is certainly a long-term commitment. When you buy it early, it instills a habit of financial consistency within you as you pay timely premium payments. This, in turn, enables you to organize, manage, and save your expenses in a very efficient way.
Low premiums
Age raises term insurance prices. Since illness rates are lower in young people and rise with age, you’re a low-risk candidate in your 20s and 30s.
When should you Increase the Term Cover of your Life Insurance Policy?
Under normal circumstances, everyone is expected to experience a growth in their family and financial responsibilities. Hence, the life insurance cover you’ve already purchased should also grow to keep up with your growing income, lifestyle, and responsibilities.
So, when should you increase the term cover of your life insurance policy? Well, there are various events which should be enough to compel you to enhance the coverage of your obtained term insurance.
These events include significant income growth from a promotion/job change, increased responsibility and the beginning of your married life, the addition of new family members, i.e., childbirth, and huge financial liability considering you’ve purchased a home loan or business loan, among other things.
Disadvantages of buying a life insurance policy too late
Ideally, you should be getting your life and health policies as soon as you start earning a decent amount. Waiting can often lead to various disadvantages, like an increase in the premium you’d be required to pay as you age more, and any health issue you develop before buying the insurance will not be covered by the policy.
Moreover, contingencies always come with a cost, and someone in your family will definitely need to bear it. A life insurance policy is going to help them to at least recover those costs.
As a result, getting a life insurance policy as early as possible with your income is always going to be the best alternative for you, and everyone out there.
Final Words
A term life insurance policy should be mandatory in every household irrespective of the number of members, and the total annual earning of them. It should be opted at an early age to benefit from low premium rates, and high assured sum, among other things.