At what age should I get life insurance?

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Purchase of life insurance depends on the financial and family circumstance that varies from person to person. Generally, a person buys life insurance as they are the breadwinner of the family, or have debts which can continue after their demise as well, and obviously do not want their loved ones to suffer because of it.

Younger age is better

While talking about life insurance it is said, the younger you are while buying the policy, the better. As the policyholder is young, they can qualify for lower premiums. When the individual is older and has medical diseases, they might not also get qualified for the insurance.

Ideal age to buy life insurance

As far as life insurances are concerned, age and health of a person are the most important part. When an individual is young and has less or no medical problems, this considerably affects eligibility and premium costs. Therefore, the younger and healthier the person is, the cheaper the premium will be.

Experts say that an individual should buy a policy as soon as they have dependents which can be parents, children, spouses etc. The process of buying a policy shouldn’t be delayed after that because as much as you will delay the process the cost of premium will increase as the time passes.

As the insurance companies might want you to undergo certain medical checkups before granting you the policy, therefore when you are younger it is a high possibility that you are healthier and have less or no medical problems which will result in a less premium as chances of the individual to ask for the claim is low.

READ MORE: How much life insurance cover do I need?

For example, if you buy a life insurance at the age of 30 years and you do not indulge in smoking and the claim is let’s suppose of 1 crore till age of 60 years then the premium the policyholder needs to pay is only 8,000 but if the same person buys the policy at the age of 35, the premium will be upto 11,000.

Even though life insurance also offers tax deductions of upto 1.5 Lakh paid against premium, under section 80C of the Income Tax Act. However, that shouldn’t be a reason for a policyholder to buy a life insurance as it is meant to cover your finances after the demise, for saving money and tax deduction an individual can indulge in other government operated schemes like Public Provident Fund (PPF).

People in the age of 20s

When an individual is in their 20s, health problems and death seems quite a far off topic. But as life is uncertain, it is always beneficial to take life insurance in early 20s as individuals do not have much responsibility at the moment, and the premiums offered by the insurance companies are on the lower side.

The premiums usually charged by young adults are between Rs. 1,400 – Rs. 1,750, which is fairly low when compared to other age groups. The main question arises, which life insurance to choose – Term Life Insurance or Permanent Life Insurance.

Term life insurance – As the name suggests term life insurance provides coverage for a specific term. It should be noted that renewal of policies after 10-20 years is quite expensive, so term life insurance where rates get fixed is a considerably better option. A lot of insurance companies allow policyholders to convert their term life insurance to permanent life insurance, so the policyholder can do so, once they are capable of paying high premiums.

READ MORE: How to file a life insurance claim?

Permanent life insurance – The particular life insurance provides lifetime coverage to the policyholder, except when the individual stops paying the premium, in that case the policy lapse. The policy comes with cash value as well, which can serve as a savings for the policyholder in the long run.

As it is known that life insurance and its coverage depends upon various factors like drug use, medical history, age, lifestyle, income etc., so it is always better to get a policy as early in life as possible, as the coverage provided is good and the premiums rates for the same is lower. 

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