Should You Acquire Term Insurance Till the Age of 60 or 99?

The primary goal of should you acquire term insurance policies is to offer financial security to people throughout their working careers.

Purchasing Term Insurance: A term insurance policy is the purest type of life insurance since it solely protects against the danger of an early death. A term plan operates in the simplest possible way: if the policyholder dies within the policy term, the nominees get the death benefit; if the policyholder survives the policy term, the policyholder receives nothing. A term plan’s premium is wholly dedicated to risk coverage or mortality costs, making these plans low-cost, high-coverage insurance policies. It indicates that you may acquire a big amount guaranteed (life cover) under a term plan for a modest premium.

If you have financial dependents, the first step in developing a financial plan should always be to get term insurance for a suitable amount insured. Once acquired, it guarantees that surviving family members meet financial objectives as they occur at various phases of life if the breadwinner (policyholder) is no longer alive.

Goals such as children’s education, marriage, and property ownership are all milestones that most people reach at a certain age. While one saves to meet them as they emerge, purchasing term insurance assures that they are not derailed if the breadwinner dies unexpectedly. Such life objectives are often attained by the time one retires, or around the age of 60.

So, should a term insurance policy be purchased till the age of 60 or for a longer length of time? Some insurance firms also provide whole-life term coverage. “The main goal of term insurance policies is to give financial security to people throughout their working life, so that if they die during this period, their salaries may be replaced and the family’s level of living is not jeopardised.”

A term plan covering them until the age of 60 may be adequate for most people who are working and will retire at the age of 60. However, self-employed persons operating enterprises may seek coverage for extended periods of time since their productive years may extend far beyond 60 years of age,” says Akshay Dhand, Appointed Actuary, Canara HSBC OBC Life Insurance.

“Given the increase in lifespan and earning potential, there is a need to consider pure term protection plans not only as an income replacement but also as a kind of legacy planning.” “With changing lifestyles and longevity, long-term coverage aids in income replacement as well as legacy and estate planning,” says Sanjay Tiwari, Chief Strategy Officer of Exide Life Insurance.

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However, if you are utilising it for legacy planning, it may not always fulfil the objective. “However, if a client lives over the age of 99, the policy will terminate on the 99th birthday or the policy anniversary will be applicable immediately following the 99th birthday and no further coverage will be offered by the supplied insurance policy/company,” Dhand explains.

The basic purpose of term insurance is to guarantee that financial dependents may maintain their level of living and achieve their varied life objectives. By the age of 60, if you have enough accumulated corpus and net worth to maintain your family for the next 3-4 decades, you may not require term insurance. “If the increased price for purchasing coverage for longer tenures is not as big as the premiums for shorter tenures,” Dhand adds, “it may be a cost effective proposal for acquiring coverage for a longer tenure.”