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What is the Best Age to Buy Term Insurance

Term insurance is the most basic form of life insurance that provides financial protection for your family. While everyone agrees that term insurance is a must for all, there are some popular misconceptions about the right time to buy it. There are many people who are of the opinion that term insurance is not needed unless you have dependent spouse and children. There are no set criteria to determine the right age to buy term insurance. The needs of people vary from one individual to another. In this situation, it is essential to consider the following factors to know the best age to buy term insurance. 

Dependent family members 

Since term insurance is primarily for your family members, you need to know their needs before you buy a cover. Here, family members need not necessarily be your spouse and children. Even your parents can be considered as dependents if you are thinking of buying term insurance. Going by this thought, it is best to buy a term insurance policy as soon as you start your job. This means that most people must buy term insurance in their early twenties. 

Cost of waiting 

If you are waiting till you get married to buy a term insurance cover, you may have to shell out a lot of extra money on premiums. The cost of term insurance increases with your age. If you buy term insurance in your early thirties, the cost is likely to be double compared to what you would have paid at your early twenties. This difference could be a lot considering the sum assured amount you choose. The best thing you can do is to take advantage of your young age and buy a cover as early as possible. 

Medical issues and aging 

This is another major factor that most people ignore. As you age, you may be prone to various medical threats. The cost of your health and life insurance will increase accordingly. Since most insurers consider the risk factor associated with life insurance coverage, your premiums are likely to increase a lot based on your health condition. If you develop a serious medical condition during your older age, a life insurance company may deny cover citing that reason. However, if you already have life insurance, the insurer cannot deny you coverage after the diagnosis of this condition. Hence, it is best to get a term insurance plan as early as possible when you are young and healthy. 

Future liabilities 

When you buy life insurance, it is also necessary to consider your future liabilities. In your mid-thirties and early-forties, you must think about your retirement planning and your children’s requirements. If you are spending too much money on term insurance during this age, it could put a serious dent in your budget. The cost of term insurance remains the same throughout the policy term. Hence, it is always best to buy the cover at a young age when it is extremely cheap. If you buy term insurance in your forties, the premium could be huge, and you may not be able to allocate money for other requirements. 

Income growth 

Some people often worry that the sum assured amount they choose for their term plan may not be enough as their income grows. This is a valid concern. As your income grows over the years and your requirements increase, the coverage amount might look minimal. However, there is always the option of getting additional coverage at any age. This should not stop you from getting a term insurance plan now. Based on your ‘human life value’, you can increase the coverage amount with additional policies. There are also policies that let you increase the sum assured amount after specific milestones. 

Conclusion 

Buying a term insurance plan is a major decision for anyone. Irrespective of the age at which you buy, you must opt for the highest sum assured amount within your affordability. Since term insurance plans are extremely cheap, you can easily get access to policies that fit within your budget. Most financial experts agree that you must buy term insurance in your early twenties. This will also help you keep your cost down and get access to the highest possible coverage amount. 

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Thursday, 21 March 2019

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