Once you have decided to take term insurance and after calculating the required insurance amount you have to decide on the tenure (number of years you need to take the policy) for term insurance before you decide on the right insurance company (things that will help you in deciding on term insurance company will be discussed in next article) and the common questions arise what is the right tenure for term insurance? or for how long you should buy term insurance? Even for those who already bought term insurance it would be ideal to read further as this article will give insights on choosing the right tenure for an insurance policy.
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Right Tenure For Term Insurance & 5 Reasons Why You Should Take Till 75 Years
The following are the reasons why I suggest you to go for the term insurance that is available with longest tenures in the market. I am not talking about paisa vasool as it gives you the maximum benefit having term insurance till the age of 75 years here I would like to stress out the risks and benefits one would have for taking term insurance for longer tenures.
Insurance Premium, Peanuts at Old Age
It is obvious that premiums for policies that offer you insurance till the age of 75 years will be higher by 5-15% when compared to the policy that is offered till the age of 60 years even from the same company and that shouldn’t be your concern, if you are likely to afford the premium now you can surely afford the same as year’s pass by as the insurance premium will be fixed based on entry age and will not be changed as you age.
Thanks to inflation the figure will is a bit high today will look very cheap 10/20 years later and imagine the same after 30 or 40 years it will be peanuts which you can manage very easily and I am sure it will be much cheaper than your monthly electricity bill at that time.
Inheritance to Heirs
Post retirement I hope most likely many of you will be financially fit and doesn’t need insurance as it is most likely that you will be done with your financial commitments, reached your goals and will be in sound position and most probably will be thinking about passing your time during retirement, that’s the good part and even I don’t want you to die soon (read before 75 years) but even if you do after your retirement and between the age 60 to 75 years having an insurance post 60 years doesn’t harm you because the premium will be peanuts which you can be managed very easily during that time and this gesture will help you in gifting some inheritance to your heirs that is totally tax free (I agree that 1 Crore may not have the same value as it have today at that time, but it will definitely have some worth).
Average Life Span
As per the latest stats, the average life span of Indian male is 63.9 years and Indian female is 69.6 years and over the globe it is 68.5 years for males and 73.5 years for females, these are the average aggregates as on date and likely to get better over the due course of time. My point here is there is a great chance of say higher than 60% (I know I am being moderate here, the actual figure should be bit higher) probability of dying for a common citizen before they attain the age of 75.
Thanks to advanced medical facilities the life span is more likely to grow in near future and I hope that you live longer than you thought and it should be one of the strong reasons why you have to plan your estates well for the later years.
Risk of Financial Uncertainty
While I sincerely hope that you get succeeded in fulfilling your goals but imagine a situation where you are unable to meet few of your goals/commitments and you are forced to carry the burden of financial liabilities even during your retirement then it should be your responsibility to safe guard the financial interests of your family and having a cover till the longest tenure possible will at least take care of things till the end of the tenure.
To cite an example, imagine a person met with accident is not able to work anymore because of the disability (which is the reason why one should also take personal accident policy) it would be tough for his/her family to meet few of their goals; rest is left for your own imagination.
You Have The Choice to Discontinue Anytime in Future
You will have the choice to discontinue your term insurance any time in future at the same moment you think that you don’t it anymore but getting an insurance post the age of 50 will be very costly affair and the chances of getting an insurance at that age will also be reduced (we to thank the life style changes here, it is very common getting high blood pressure, diabetes, etc. but everything comes for a price sad but true) and also the premium will be very high to afford so going for the long tenure policy (read term insurance till the age of 75 years) is always better when you can get it with no conditions at young age.
Between Us: For those who are planning to buy term plan, are you convinced enough to take the term insurance for the longest tenure? Else do you have any other reasons to check? Please share your views on this.
For those who already bought the term insurance, how have you decided the right tenure for term insurance when you made the decision and please list down the reasons why you choose that? Do you think that you are good to go with the current one you have? If you think that you haven’t planned well, what are the changes you would like to do now? Please share your views which could lead to new thoughts.