What Should be the Duration of Term Insurance Plan?

Even though living life to the fullest is the new life mantra, death and unforeseen problems are inevitable. With the passing of time, new relationships and responsibilities get associated with life. Choosing appropriate financial resources like life insurance plans can aid in covering the financial shock on your family if something uncertain happens to you.

The Ideal Length of Term Insurance

While some insurance companies offer policyholders for nearly seventy-five to eighty-five years, others offer coverage for up to ninety-nine years. The term is also a negotiable factor depending on the insurance company. Evaluating the duration of term insurance is as essential as evaluating the coverage requirements.

What are the Factors to Consider While Choosing the Duration of a Term Insurance Plan?

• Age
  

  The duration of a term insurance plan depends on your age when you invest in one. The younger the policyholder is, the longer the term can be.
  

  • For people in their 20s
    

    Investing in the best term insurance plan depends on your age and retirement plans. Let's say you are in your 20's and are likely to retire by the age of 60; then, you must go for a 35-40-year term plan. This will get you covered up until your desired retirement age.

  • For people in their 30s and 40s
    

    In the 30s and 40s, one begins to build a family. They start getting married, have kids, and initiate a family of their own. At this stage of life, a person should consider investing in term life insurance plans.

  • For people in their 50s and 60s
    

    Once you enter the age bracket of fifty to sixty, you will likely fulfil most of your life responsibilities. All of your kids have most likely settled, and the burden of their necessities must have decreased. Now, as you have lived most of your life, you must opt for the best term plan that will suit your requirements. You can opt for a fifteen to twenty-five years term plan, which is also suitable for your pocket.

   

• Liabilities
  

  If you are someone who has debts, you must count your liabilities while deciding the duration of your term life insurance plan. The cover for your term insurance should be equivalent to your outstanding loan amount. In addition, the duration of the term insurance plan should be equivalent to the balance EMI period. Thus, even if you face an early demise, your family will not bear the loan burden. In addition, the insurance would proceed and help to square off the debt liabilities.

• Financial Goals
  

  With a family by your side, you would have multiple financial milestones. It would help to count on your financial goals while deciding your term insurance's duration. With the best term insurance plan in India, your financial responsibilities can be taken care of even in case of your demise.

• Monthly expenses
  

  Opt for ten to fifteen times coverage of your yearly expenses is typically advised. For instance, if your annual income is around five lakhs, you must consider investing about ten to fifteen times it. The estimated cover must be close to seventy-five lakhs. It is essential to go for a high cover rate because inflation, over the years, would make everything costlier. Thus, to cover you and your family, consider future expenses.

An additional deciding factor is affordability. The longer the term insurance plan tenure, the lower the premium. And, the longer the duration, the lower the premium.

Consider your cash flow and current savings when you evaluate if you can afford to pay the premiums on time for the whole duration.

Conclusion

The premiums for term insurance policies are different for everyone. They are calculated based on health conditions, age, premium paying capacity, etc. Here, ensure you do not hide any essential detail from your insurer. You would need to pay premiums in exchange for life coverage. Conclusively, term insurance with a return of premium is an ideal step towards securing the future of your loved ones. Visit now to know more about ulip plan, wealth plan, retirement plan and long term savings.