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Best Age To Buy Term Life Insurance

Buying a term life insurance policy is a critical financial decision that can provide peace of mind and security for your loved ones. Many young adults believe that buying a term plan is a distant concern, something that needs to be done at a later stage of life.Read More

While there isn't a universally right age to invest in a term insurance plan, understanding the right time to buy one and how it fits your life stage can be pivotal for the financial security of your loved ones. Let us know and explore when to buy a term life insurance policy and the various advantages it offers at different life stages.Read Less

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Written ByPalak Bagadia
AboutPalak Bagadia
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Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 19th Nov 2024
Modified on: 19th Aug 2024
Reading Time: 15 Mins
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What is term insurance?

 

Term insurance is the simplest form of life insurance policy, which provides coverage for a specified period against life risk due to the untimely death of the insured during the policy term and pays a death benefit to the nominees to fulfil their financial liabilities and ensure a financial safety net for the loved ones. Term insurance plans are protection-oriented plans that aim to cover the risk of premature demise. This means that if the life assured passes away during the policy tenure, the death benefit is paid, which can support the family financially. Besides the return of premium plans, term plans have no maturity value. If the life assured survives the policy tenure, no maturity benefit is paid. However, return of premium plans refund the premium paid over the policy term on maturity and are, thus, different from basic term plans.

 

Reasons to buy Term insurance

 

Here are some of the reasons to consider buying a term insurance policy:

 

1. Affordable Premiums

 

Term insurance generally offers affordable premiums in comparison to other types of life insurance policies, allowing you to secure substantial life cover without high premium costs.

 

2. Tax Benefits

 

Investing in term insurance offers tax benefits under relevant sections of the Income Tax Act, of 1961. You can claim a deduction on your annual premium paid for term insurance plans under Section 80C of the Income Tax Act under old tax regime and also get tax-free death benefits under Section 10(10D) subject to provisions stated therein.

 

3. Flexibility

 

Term insurance plans offer the flexibility to choose the coverage amount  and the tenure of the policy based on your insurance needs and financial goals.

 

4. Add-on riders

 

You can also customise your term insurance policy with add-on riders such as critical illness riders, accidental death benefit riders, etc. to enhance the scope of your term policy at an additional premium cost.

 

5. Peace of mind

 

Term insurance policies provide the much-needed peace of mind that your family and loved ones are financially protected and secured even in your absence.

 

The best age to invest in a term insurance plan:

 

The right age to buy term insurance varies from individual to individual, depending on family and financial circumstances. In general, you need a term life insurance policy if you are the breadwinner of the family and have several dependents on you or if you have outstanding debt, which will continue after your death. Life insurance becomes more expensive with every passing year, so the sooner you buy one, the better. As people grow old, they may develop health problems, which can increase the premiums while buying a term plan  . While there's no one-size-fits-all answer, here are term insurance benefits for each age group range, presenting unique opportunities for securing coverage and guiding the answer to when I should buy term life insurance:

 

1. In your 20s

 

The simplest answer to when to buy term insurance is your 20s as the premiums at such an early age are lower with comparatively fewer financial obligations on the individual making it preferred time to buy one.     As people age, their financial responsibilities increase significantly. Further, the risk of medical diseases and health problems is much lower in the 20s ensuring eligibility.

 

2. In your 30s

 

The need for term insurance increases as one settles into a career and starts families in their 30s. At such age, you may have dependents who rely on your income. Term insurance provides them the financial security in your absence to lead a financially stable life. Premiums in your 30s will be reasonable compared to a later age, making it a wise investment decision.

 

3. In your 40s

 

While the premiums for term insurance may increase in your 40s, buying one can still be advantageous especially if you have long-term financial goals such as your child’s education, their marriage or outstanding loans or debts such as home loans, etc. Many insurance companies offer term plans to cater to individuals in this age bracket.

 

4. In your 50s and beyond

 

It’s never too late to consider buying a term insurance policy. While the premiums at an older age are higher due to high mortality risk, for those with ongoing financial responsibilities and preparing for retirement. Term plans act as a security net for your spouse when you are not around to enable them to lead a financially stable post-retirement tenure. However, before buying a term plan, ensure you are eligible, given your medical and health conditions and the terms of the term insurance policy.

 

The Factors to consider when deciding the age to buy term insurance

 

It is suggested that you buy a term insurance plan as early as possible to enjoy maximum benefits. If you wait too long to buy one, not only does it become expensive, but it also becomes harder to get the policy approved by the insurance underwriter. Here are some of the factors to consider when deciding the right age to buy term insurance:

 

5. Financial Responsibilities

 

Assess your current and future financial responsibilities and obligations. If you have several dependents such as a spouse, children, or ageing parents), it’s essential to ensure early coverage to secure them financially. The more responsibilities one has, the earlier one should consider buying a term policy.

 

1. Income Stability

 

It is also necessary to consider your income consistency and job security when deciding the best age to buy term insurance. If you have a stable job with a reliable income, it is a good time to buy insurance.

 

2. Health Status

 

Your health plays an important role in determining the premiums. Buying term insurance when you are healthy and young usually lowers premiums. Also, if you have pre-existing medical conditions, it may be more challenging to get affordable coverage later on.

 

3. Financial Goals

 

Consider your financial goals and objectives, such as buying a home, investment plans, your child’s education or saving for retirement. Term insurance enables you to allocate funds to your financial goals while ensuring you have life protection in place.

 

The right age to buy a term plan based on different situations

 

Deciding the right age to buy a term insurance plan can impact your financial safety and the well-being of your family. You can consider some of the following situations when deciding when you should buy term life insurance.

 

1. If you are the sole breadwinner of the family

 

For sole breadwinners of the family, it is essential to consider term insurance as early as possible as it ensures that your family is not left financially strained to meet  day-to-day expenses. A term insurance policy enables them to cover their essential expenses such as daily living costs, housing, and education, providing peace of mind for you and your family.

 

2. If you have a tight budget

 

If you are beginning your career or managing student loans, your budget may be tight and constrained. In such a case, you can consider buying a basic term insurance policy as even a smaller coverage can provide vital financial protection at an affordable premium. As your financial situation improves, you can increase your plan coverage later.

 

3. If you are starting a family

 

Starting a family is also a good time to buy term insurance, as it may lead to additional financial responsibilities, including spouse & child care and education. Acquiring insurance coverage at this time ensures that your family’s financial future is  protected regardless of what the future holds.

 

4.If you are planning to buy a home

 

If you are planning to take on a mortgage for a home, it can be considered ideal for buying term insurance.   This will safeguard the financial future of your family if you pass away before the mortgage or the home loan is paid off, ensuring they do not face financial strain.

 

Conclusion

 

When buying term insurance, younger is usually better. The longer you delay it, the more expensive it will become. Further, if you wait for too long, you are at risk of declining health, which could further increase your premium rates or even make you ineligible for certain policies. The best age to buy a term life insurance policy varies based on your family situation, personal circumstances, finances, and obligations.

 

Frequently Asked Questions

 

 

1. Who is eligible for term insurance?

 

Individuals who qualify on the eligibility parameters of insurance companies can buy a term insurance policy although eligibility may vary by insurance company and terms of the term insurance policy.

 

2. Can I buy term life insurance if I'm older?

 

Yes, older individuals can also buy term life insurance, but the premiums for the policy may be higher due to age and potential health issues.

 

3. What are the factors that affect term insurance premiums?

 

Key factors that affect term insurance premiums include age, health, lifestyle habits (such as smoking), gender, and the family medical history1 amount other factors.

References

1. https://www.investopedia.com/articles/investing/102914/7-factors-affect-your-life-insurance-quote.asp

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*Above illustration is for Bajaj Allianz Life eTouch II - A Non-Linked, Non-Participating, Individual Life Insurance Term Plan (UIN:116N198V01) considering Male aged 25years | Non-Smoker | Policy Term(PT)– 30 years | Premium Payment Term (PPT)– 30 years | Sum Assured opted is Rs.1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 5,092. 2nd Year onwards premium Rs. 5,520. Total Premium Rs. 1,65,172 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly instalments (Lumpsum Payout Percentage: 40, Income Payout Percentage: 60). Income payout instalment opted for 40 years | Premium shown above is inclusive of Online Discount only, no other discounts have been considered and exclusive of Goods & Service Tax/ any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

##Tax benefits as per prevailing Section 10(10D) and Section 80C (under old tax regime) of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

**5% Discount applicable for customer's first individual life insurance policy, applicable only on first year’s premium. 5% Discount for salaried customers, applicable only on first year’s premium. 6% Discount on online purchase is available for regular premium payment and limited premium payment frequency on first year's premium.

$Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium means total of all the premiums paid under the base product, excluding any extra premium and taxes, if collected explicitly.

Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any Call made, including via Voice over Internet Protocol & WhatsApp, SMS or WhatsApp messages, in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

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Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


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~Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

*Conditions Apply – The Guaranteed benefits are dependent on policy term, premium payment term availed along with other variable factors. For more details please refer to sales brochure.

Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

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Disclaimer

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

Please refer to BALIC Privacy Policy

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Disclaimer

%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

X
Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


X
Disclaimer

*Above illustration is for Bajaj Allianz Life eTouch II - A Non-Linked, Non-Participating, Individual Life Insurance Term Plan (UIN:116N198V01) considering Male aged 25years | Non-Smoker | Policy Term(PT)– 30 years | Premium Payment Term (PPT)– 30 years | Sum Assured opted is Rs.1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 5,092. 2nd Year onwards premium Rs. 5,520. Total Premium Rs. 1,65,172 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly instalments (Lumpsum Payout Percentage: 40, Income Payout Percentage: 60). Income payout instalment opted for 40 years | Premium shown above is inclusive of Online Discount only, no other discounts have been considered and exclusive of Goods & Service Tax/ any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

##Tax benefits as per prevailing Section 10(10D) and Section 80C (under old tax regime) of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

**5% Discount applicable for customer's first individual life insurance policy, applicable only on first year’s premium. 5% Discount for salaried customers, applicable only on first year’s premium. 6% Discount on online purchase is available for regular premium payment and limited premium payment frequency on first year's premium.

$Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium means total of all the premiums paid under the base product, excluding any extra premium and taxes, if collected explicitly.

Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

X
Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any Call made, including via Voice over Internet Protocol & WhatsApp, SMS or WhatsApp messages, in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

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