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Advisor’s Tip: How to Meet Your Financial Needs With Term Plans at Every Stage of Life

09 June 2022, 11:15 AM

Term insurance is for every stage of life. Be it during youth, life post-marriage, or after becoming a parent. There are a few stages where term insurances stand out to be the need of the hour. It is for every person who wants to leave something for the family, in their absence. 

The importance of term insurance lies in financial protection. Term insurance ensures that the family of the deceased is financially stable in case of an unfortunate event and helps live a secure and stress-free life. It offers solutions best suited for every person at every stage. 

There are term insurances which are suitable during the thirties, some during forties, and some for senior citizens. Let us go through term insurances at every age and what benefits they offer. 

Term Insurance At Every Stage - 20s/30s/40s/50s

There is no right age to buy term insurance. If there is income, stability, and a lovable family, term insurance should be a priority. 

Term Insurance During the 20s

The period from twenty to thirty in a person's life is considered the most crucial time. Professional career kicks in. There are fewer responsibilities and things to worry about which makes it an ideal time to choose term insurance. 

Early term insurances are fairly cheap and can be continued over a long period. Usually, during the 20s, there are no heavy debts to pay off unless of course there is an education loan of more than 20 or 30 lacs. God forbid, if something happens during a person's 20s, a term insurance policy will pay off the entire burden. 

Some of the best term insurances for early subscription include:

  1. ICICI Prudential iProtect Term Plan
  2. Bajaj Allianz iSecure term plan
  3. Aditya Birla Sun Life term Protector Plus plan
  4. Aviva Life Shield advantage plan
  5. Exide Life My term insurance plan

Also, in your 20’s since you have low liabilities, you need to consider that your liabilities would rise with age. Hence you can opt for term plans with enhanced coverage which would come handy at a later point of time.
For example, the Aditya Birla Sun Life term Protector Plus Plan can be taken as early as 18 years of age, with a benefit of two coverage options. 

  1. Sum assured increases every year @5% or @10%, per choice, with your rise in liability.
  2. The death benefit can be availed in lump sum or instalments at 10 years with @11% sum assured, at 15 years with @8.37% sum assured, or at 20 years with 7.12% of sum assured.
  3. Option to avail 5 additional riders, which increases the coverage benefits

Term Insurance During the 30s

The thirties is the time when people decide about marriage, becoming a parent, and also job changes. Responsibility manifolds in its way without a hint. All of a sudden, the shift from 20 to 30 brings down worries about securing a child's future, meeting financial obligations like parents’ medical expenses, child’s education, home loans, car loans, long term commitments which are possible with a stable income only. 

A sudden increase in income, expands the standard of living, spiralling financial expense in every way possible. A term plan most suitable during the thirties should include:

  • Long term coverage
  • Protection against liabilities
  • Riders for additional benefit
  • Tax benefits
  • Protection from illness
  • Income options under unfortunate events

If you have not taken your term insurance plan earlier, you need to opt for the same now, so that you can protect your loved ones against any unforeseen events. Term insurance plans with enhanced benefits can surely be considered.
For example, the Canara HSBC eSmart Term Plan has:

  1. The option of two separate death benefits
  2. A maturity age of maximum of 75 years
  3. Yearly payment frequency (hassle-free)
  4. Easy buying, online purchase option

Term Insurance During the 40s 

Term insurance during the forties is a little late to cover up, especially in case of a person with a critical illness, debts, and financial liabilities, taking a toll. Given that term insurance is wholesome and affordable, the earlier it is planned, the better. A youngster who is single, healthy, gets term insurance plans at low premiums when compared to an old person.

For those looking for term insurance during the forties, it is never too late, and do not worry. There are excellent term plans for 40 years old. Not one, but several options available:

  1. LIC Anmol Jeevan II 
  2. HDFC Life Click2Protect
  3. Bharti AXA e-protect
  4. SBI Life eShield
  5. ICICI prudential i-Protect

All of the 5 term insurance plans are considered one of the best options lately. All of them offer:

  • Term insurance during the 40s
  • They are relatively inexpensive compared to the other plans in the market
  • They offer high coverage as well as the option to add riders for additional benefits
  • In addition to that, all of these plans offer tax benefit under section 80C

In fact, when you are in your 40s, you need to check all the variants that a term plan offers and avail the highest possible coverage with the maximum benefits now. Sum assured restriction gets strict for higher ages and hence opting for a high sum assured in your 40’s make sense.

For example, the ICICI prudential i-Protect term insurance plan is available in four variants namely:

  1. Life
  2. Life plus
  3. All in one
  4. Life and health

And the ICICI prudential i-Protect term insurance plan offers:

  1. Complete coverage against death
  2. Inbuilt benefits for comprehensive coverage on terminal illness and permanent disability
  3. The plan has 4 payout options for the future needs of the nominees
  4. For female customers, the plan offers special discounts on premium charges
  5. The plan also offers additional death benefit up to 50% of the original sum assured, subject to the limit of INR 50,00,000

So, you need to weigh the pros and cons of each option, before selecting the one which best suits your needs.

Term Insurance During/After the 50s

Term insurance becomes expensive with age. The earlier one buys, the less is the charge of the premium. The risk also increases as such premiums differ. However, it is not unusual for people to buy term insurance at 50 years. Some of the best term insurance plans at 50 offer benefits including riders and disability coverage. 

The best term insurance plans after 50 include:

  1. Aviva i-Life
  2. Aegon Life Term insurance
  3. HDFC Life Click2Protect 3D plus
  4. Bharti AXA Life Flexi term
  5. IDBI i-Surance Flexi term
    Since the premium gets higher with age, you need to choose the plan with maximum benefits as compared to the cost of coverage per thousand sum assured. You can consider the HDFC Life Click2Protect 3D Plus term insurance plan which includes:
  6. Large life cover at a low rate
  7. 3D protection, precisely protection against death, disease, and disability
  8. Tax benefits under section 80C, and section 10 (10D) of the Income Tax Act
  9. Discount based on lifestyle habits
  10. Flexible cover to add riders
  11. Option for a return on premium

When opting for a term insurance plan in your 50, these are the points you need to keep in your mind:

  • The premiums are relatively high as health plays a major role
  • The tenure of the plan is relatively shorter
  • The coverage is low because of the tenure
  • The maximum term under insurance is for 20 years

Term Insurance is best bought early in life: but it's better late than sorry.

The younger a person is, the cheaper the premiums are. For example, INR 1CR of sum assured in ICICI Prudential iProtect Term Plan would be:

 Term (till 60 years)Annual PremiumTotal Premium in the entire policy tenure
25-year old male, non smoker35 yearsINR 8850INR 3,09,750
35-year old male, non smoker25 yearsINR 12,665INR 3,16,625 (more aggregate premium than the 25-YO)
45-year old male, non-smoker15 yearsINR 20,953INR 3,14,295 (higher than both 25-YO and 35-YO)

This proves, the earlier you opt for your term insurance coverage, the better it is.

Unfortunately, quite a lot of people develop some ailment or pre-existing condition like cholesterol, blood sugar, pressure, etc. with age which in turn, affects the overall health of the individual. Hence it is always a great idea to opt for a term insurance plan as early you can.

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