When to buy term insurance?

Nov 20, 2017 | 2 years ago | Read Time: 2 minutes | By iKnowledge Team

A term plan is a time-bound life insurance policy for which you pay premiums at regular intervals. In a term plan, you enjoy high coverage at low premiums. In case of your demise, your nominee gets the death benefit of your term insurance plan. Thus, investing in such a plan ensures your family has financial stability in your absence.

Now if you are wondering, when is the right time to buy term insurance, we are here to help you with that:

In your early 20s

Investing in term insurance when you are in your early 20s, unmarried, and have begun working is ideal. This is because due to lesser responsibilities, your expenses at this time are lesser. This enables you to create a strong financial cushion for the future.

In your mid or late 20s

From starting a new chapter of life with your spouse to planning a family, your responsibilities increase in your mid and late twenties. Along with your responsibilities, the needs of your family increase, too. Therefore, investing in a term insurance plan at this time ensures that your family is well taken care of in every future step, in case of an unfortunate event.

With growing age and added responsibilities, it is wise to increase your coverage amount by paying an additional premium.

To understand your requirements better, there are many online interactive insurance calculators available. A Human Life Value (HLV) calculator helps you plan your financial goals and calculate the amount of cover your financial dependents will need in your absence. Similarly, a term insurance calculator lets you calculate the monthly premiums towards the same.

When you are young, you are more likely to get the desired life coverage at an affordable rate. Your responsibilities will grow with each passing day. Therefore, investing in a term insurance policy at this time ensures that your policy also grows along with your growing needs and responsibilities. And if you haven’t invested in a term insurance policy yet, then this is the right time for it!

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