Difference in buying term insurance in your 30s & 40s - Ganna Magazine Blog

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Difference in buying term insurance in your 30s & 40s

Life is full of unexpected events that don’t issue a warning before coming. We all hear tragic news happening around us all the time. You never know when the adversity would strike us causing permanent damage or even death. If the victim of this adversity is the bread winner of the family, it will leave the family devastated emotionally and financially.  This is where a term plan comes in as a saviour to secure your loved ones from financial distress.
A term plan is available on offer to anyone between the age of 18 years and 60 years. A term plan is a pure life risk plan and it is bought by the insured to secure its dependents if he or she is not around anymore. As we approach different stages or life cycles in our lives our need and requirements change. For instance, our liabilities are more during early stages in our life but they gradually reduce over a period of time when we have accumulated some wealth. Likewise, getting a term plan in 30’s is different from getting a term plan later in life like 40’s. Let’s check out what are the differences.

Getting Term Insurance plan in your 30’s

30’s is a very crucial period in our life. Lots of big changes, decisions,events take place during this period. Marriage, new house, car, starting a family, getting settled in your job etc. Most of the people who acquire big assets such as a new house, car etc. take long period loans. The house loan needs to be paid on regular basis over fixed long-term period. Our personal balance sheet has more liabilities and debts than assets. This is the most sensitive time of a person’s life when he/she has everything to lose. The term insurance here should be purchased which would cover your long-term debts and also give financial cushion to your spouse, children, and dependent parents to secure their future.

As a thumb rule, a term insurance should be purchased ten times your annual income and add more as per the liabilities. The period of the term insurance should be at least 30 to 35 years considering the period of long term debts.  It is also recommended as you have a longer period to cover in a term plan getting an increasing cover feature in a term plan is a must. This will ensure that the cover will further increase with the growing annual inflation.

A 35-year-old non-smoking male can get an INR 1 crore cover for around INR 890 a month for 30 years period.

Getting Term Insurance plan in your 40’s

Once you’re in your 40s, you might have stabilised in your career by then and would be feeling proud of what you have achieved. And maybe you are finally at a place where you can afford the type of lifestyle you have always wanted, one filled with travel, leisure, and financial freedom. While everything may be going great at the moment, all it takes is an unfortunate series of events to turn your world upside down so don’t underestimate importance of having proper insurance policies in your life.

In 40’s the life stage needs are different. Here we are planning for higher education for our children, save money for their marriage etc.  We might also need to protect the long-term debts, if they pose significant threat to the dependent family in your absence. Term insurance premium is calculated basis the age of the policy holder so it might come dearer at this age. Nevertheless, after calculating the financial needs you can select the coverage. As in 40’s the period of term insurance will be less an increasing term plan might not be needed as you will be having good estimate on your coverage. The period of the term insurance should be anywhere between 10, 15 and 20 years depending on your future plans.

A 45-year-old non-smoking male can get anINR 1 crore cover for around INR 1,350 a month for 20 years period.

Given the uncertainties of life, the not-so-safe roads we travel on or other lifestyle risks in these times, a term plan can save you from a lot of worries by securing the lives of your loved ones. So, it is highly recommended to buy one before investing your money in any other financial product.Getting a term insurance plan and securing yourself is never too late but to maximise your financial security net and to get great benefits at a low premium it is advisable to get it when you are young.
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