What Is The Age Limit For Term Insurance?

For many people, monetary stability is not a primary source of happiness. However, it cannot be disregarded entirely. We all want our loved ones to be happy and healthy in life. But many of us often forget to build a financial nest that will protect them in our absence. As a sole earner in the family, it becomes your responsibility to ensure financial protection for them. This is where a term insurance plan comes into picture.

A term insurance plan is a life insurance policy that offers financial stability to your loved ones in the unfortunate event of your death. Much like any other insurance instrument, term insurance also comes with a minimum and maximum entry age.

However, there are a few misconceptions associated with the term insurance age limit. And we are here to help clear the air in between.

What is the Term Insurance Age Limit?

Know that term insurance can be bought between the age of 18 years and 65 years. So, you can still purchase the policy at the age of 65 years and opt for coverage up to 99 years of age. It is crucial to analyse term plans based on different stages of life. As a matter of fact, financial objectives change with age, and that will require modification in the coverage accordingly.

Besides, it is in your best interest to purchase a term plan at an early stage in life. So, before we dive deep into the discussion of term insurance age limit, let us know why it is imperative to buy term insurance early.

Buying a Term Insurance Policy at a Younger Age

There are several benefits of buying term insurance at an early age.

1. The Premiums Charged are Low

As explained earlier, your 20s is the prime time of your life. You are leading a healthy lifestyle, and the chances of incurring critical illnesses are less. Hence, the insurer takes you as a low-risk applicant, which further leads to lower premiums. Considering it is a monetary benefit, buying term insurance at an early stage in life is highly recommended.

2. Offers Flexibility

As you grow old, the financial necessities change. The economic concerns in your 20s are quite different from the financial liabilities in your late 30s. You can buy a term insurance plan based on your current lifestyle and affordability. You can make changes to the policy and enhance its coverage with rider options in the near future.

3. Tax Benefits

You can avail multiple term insurance tax benefits. The premiums paid toward the term plan can be claimed for tax deductions under Section 80C of the old income tax regime. Also, the death benefits received by the beneficiaries of the policy are tax-free under Section 10(10D) of the Income Tax Act, 1961.

Now that you know the importance of buying term insurance at a younger age, let us understand how the policy benefits at each life stages.

Term Insurance in Your 20s

People in their 20s are quite enthusiastic about taking on life and building a career. While people are graduating and getting a new job, most of you enter the professional market with a burden of student loan. Since you are a fresher, the salary package is relatively low, and it may take a few years for you to repay the debt amount.

In such a situation, if you happen to suffer from an unfortunate incident, the entire financial liability is shifted to your parents or family. Therefore, having a term insurance plan under your name will protect your parents from bearing the financial overburden and help pay the debt easily.

Illustration 1:

Consider this example for your better understanding.

Meera recently graduated and secured a job at a well-established firm in India. Her starting salary package was enough to repay her student loan EMIs and other minor expenses. However, despite this, she purchased a term insurance policy. Besides getting a term insurance plan at an affordable price because of her age, the policy helped her save money on tax.

If you see, one of the prime term insurance benefits is that the policy is quite cheap on the pocket when it is bought at an early stage in life. Since you are young and healthy in your 20s, the insurer considers you as a low-risk applicant. Hence, the premiums charged are low.

Term Insurance in Your 30s

Many people consider starting a family and building a life in their 30s, and financial liabilities are a part of a growing family. You may want to buy a new car or shift to a new home, which will require taking a loan. Also, while you have to take care of your children and their education, your parents may become financially dependent on you as well.

In all, any debt is a financial overburden, and you become responsible for securing the financial future of your loved ones. On the other hand, you have a stable and substantial income in your 30s. But relying on your savings alone will not fulfil the financial necessities in the near future.

Illustration 2:

Let us continue the above example here.

Meera, now in her 30s, has been married for three years. She and her spouse recently decided to buy a new house to welcome their new baby. Along with the financial overhead of a home loan and the expenses of the newborn, Meera is thankful that she purchased a term insurance plan well in advance. She can rest assured that the financial liabilities and her baby will have a secure future, even in her absence. Besides, as mentioned earlier, she can continue to avail the term insurance tax benefits.

If you ask us, term insurance is a stepping-stone towards a sound financial plan. For complete financial security of your family, especially in case of your death, having a term plan is a boon.

Term Insurance in Your 40s

For many people, financial responsibilities may vary when they are in their 40s. While most of your liabilities are paid off, there might be a few instalments yet to be paid. But this does not mean that your responsibilities are over.

Your children are growing up, and you would want them to have the best educational experience. Most kids prepare to pursue their higher education abroad. As parents, all you can do is support their dreams and help them with the initial finances.

But does that mean they cannot fulfil their dreams in your absence?

Illustration 3:

Mrs Sharma recently received the news of her husband’s death. Mr Sharma was in his 40s. As a husband and father, Sharma sir did his best to provide for his family. His unfortunate demise has left his loved ones in great grief. However, Mr Sharma made sure that his wife and children are financially secure in his absence. Soon after the death, Mrs Sharma raised a successful claim against his term insurance plan. The payout received has been helping the family take care of their daily expenses and pay for the children’s education until they are capable.

What we can learn from Sharma sir is, if you want to protect your family’s dreams, even in your absence, a term insurance plan is necessary. If your child’s higher education is the only concern for you, then you have the liberty to customise your term plan accordingly.

Another thing that many people forget in their 40s is the medical care of their ageing parents and spouse. With the term insurance payout, they can access the best of medical facilities, even in your absence. More so, buying term insurance in your 40s is still easy on the pocket compared to buying a term plan in your 50s.

Term Insurance in Your 50s and Later

If you are in your 50s and still have not purchased a term insurance plan, now is the time to do so. While your children may be learning to be financially independent, you are nearing your retirement age. Also, health can take a severe hit in the late 50s, and you are prone to fall sick often.

Illustration 4:

Mr Rakesh is in his 50s and recently purchased a term insurance plan with critical illness cover. Although he has health insurance to take care of his and his family’s medical expenses, he believes a term insurance plan is just as necessary. So, if he ever falls short on his health insurance coverage, the term plan payout can be used to cover the shortfall. Additionally, having a term plan with critical illness cover allows you to claim extra deductions under Section 80D of the Income Tax Act, 1961.

Term Insurance for Senior Citizens

Previously, it was difficult for senior citizens to buy term insurance in India. Today, people above the age of 60 years can avail the benefits of the term plan. Term insurance for senior citizens can be used to pay off any outstanding financial liabilities, fund dependent children (if any), protect the spouse after death. However, there is a catch. Senior citizens need to have a clear medical record to avail term insurance plans. So, do check with the insurer before purchasing the policy.

Minimum and Maximum Age to Buy Term Insurance

The following table gives an overview of the minimum and maximum age to purchase term insurance in India.

Minimum Entry Age for Term Insurance

18 years old

Maximum Entry Age for Term Insurance

60 years old

Check with the insurer if they provide term insurance for senior citizens if you are above 60 years old.

Maximum Term Insurance Coverage

75 years

To Sum It Up!

A term insurance plan allows you to lead a worry-free life. It safeguards your loved ones financially in your absence so that their dreams and aspirations do not take a back seat due to lack of financial support.

You can buy term insurance plans available on Finserv MARKETS and benefit from features such as extensive coverage, affordable premiums, customisable plans, and more. You can also use the term insurance calculator to determine the policy cost before your purchase.

Besides, you can buy term insurance using our term insurance app. This means you can safeguard your family’s financial future from the comforts of your home or on the go. So, what do you choose to do?

FAQs On Term Insurance Age Limit

  • ✔️What will I get when the term insurance plan matures?

    Ideally, term insurance plans only provide death benefits. So, if your policy matures while you are still alive, no maturity benefits will be paid. 

  • ✔️How much life cover should I opt for when buying term insurance?

    Use the formula below to calculate the term insurance coverage you should opt for -

    Minimum Sum Assured = (Annual Income x 10 Times) + Debts

  • ✔️Can I change the term insurance duration after the policy is issued?

    No. Once the policy is issued, you cannot make changes to the term insurance duration.

  • ✔️Do smokers have to pay a higher term insurance premium?

    Yes. Considering your health and lifestyle habits plays a vital role in determining the term plan cost, smokers indeed have to pay a higher premium. 

  • ✔️What are the types of rider benefits in term insurance?

    Some valuable term insurance rider benefits are as follows:

    ●     Critical illness cover

    ●     Return of premium cover

    ●     Waiver of premium cover

    ●     Income return benefit

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