When is the Right Time to Buy a Term Plan?
Published On Jul 18, 2021 10:00 AM By Kanika Wadhwa
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A term insurance plan is a kind of life insurance which offers the policyholder a life cover for a specific time duration. If the policyholder dies untimely because of an unfortunate event, then their nominees are entitled to receive the pre-defined death benefit. The main purpose of a term insurance plan is to offer financial safety to your family members against the income loss that could possibly happen because of your death.
Who requires a Term Insurance Plan?
The answer to this particular question depends upon several factors. For now it is important for you to understand that a term insurance plan is significant to offer a financial safety net to your family members in your absence, which could lead to an income loss. This loss of income can also result in compromising on the long term goals of your family such as higher education of children, marriage, etc. Also , in case you hold any liabilities such as car loan, home loan, education loan that needs to be repaid, then in case of your untimely death, your loved ones may face financial burden due to it. Therefore, if you need a term insurance plan, this totally depends upon the financial goals of your family, financial dependents and your other liabilities.
What is the Right Time to Purchase a Term Insurance Plan?
Let us understand this by taking different life stages into account, it would help you in getting an idea about your insurance needs:
Early 20’s and Unmarried
People today wish to get married late in life. At this stage, the expenses you incur are much less and it is the right time to think of the future and create a financial safety net for the later stage of life. Buying a term insurance plan at this phase is much more economical and also helps one in saving the taxes.
Mid or Late 20’s and Married
It is a critical time because you are about to start a new chapter in your life. For people who have married recently, it is an ideal time to invest so that you can develop a strong financial backup for your family that is most probably going to expand in the coming years. At this life phase, if you decide to purchase a term life insurance then you need to think about taking a wider coverage in comparison to your past investments.
Having Young Ones
At this particular phase of your life as you become a parent, your responsibilities increase manifolds. Your majority of the thoughts revolve around providing your child with the best possible education, health related expenses and other sundry expenses. This is the time when you plan on providing safety to your family and making sure that they stay financially independent even in your absence. Here, your long term liabilities and debt needs to be covered along with securing your as well as your family’s future with a high coverage term insurance plan.
At the End
It is recommended to purchase a term insurance plan early in life, as it is the right time to purchase a term insurance plan alongside making sure that you are receiving the life coverage that you desire. Also, purchasing a term plan in earlier life stages is much cheaper in comparison to later life stages. Once you are over 35 years in age, there is a higher chance of the insurance provider rejecting your proposal request or can even charge a higher premium amount. However, in case you have missed buying a term plan earlier, then plan to invest in one as soon as possible for the betterment of you as well as your loved ones.
Also read - How To Buy Term Insurance Online?
How Term Insurance Is Important for Different Age Groups?
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.