Term Insurance: When to Buy and How Much Premium to Pay for it?


Term insurance is considered one of the best forms of life insurance that allows you to protect your life simply and affordably. Thus, if you are looking to financially safeguard your loved ones in your absence, you must opt for term insurance and pay the correct term insurance premium for the cover. Read this article to know how to select the best plan at the best rate.

What is Term Insurance and When to Buy it?

Term insurance is a type of life cover where your beneficiary receives the sum assured in case of your death within the policy period. If you outlive the policy period, there is nothing in return. The term insurance premium is based on several factors such as the cover value, your age, etc. You can use a term plan premium calculator to know what the premium will be before you buy the policy.

When Should You Get a Term Plan?

Once you know what term insurance is, you can consider getting one for yourself. When should you get it? The answer is quite simple—you need to get term insurance as early on in life as possible. There are several benefits of buying the policy when you are in your 20s or early 30s, making use of the term plan premium calculator. Here are some advantages:

  1. The term insurance premium is lower

When you use a term plan premium calculator, you get a fair idea of the premium liability. You get to see that the premium is much lower when you buy a term plan at a younger age, and it does not rise once the policy is issued. This is a major advantage of buying term insurance at a young age.

  1. You are fitter

As you age, your health becomes more fragile, and you develop several health disorders. This makes the plan more expensive and also difficult to obtain. You don’t face this issue when you are young; make use of this benefit and get term insurance at the earliest.

  1. It is more affordable

Since you have fewer responsibilities, you have a higher disposable income at this age. This makes it easier to afford the term insurance premium.

Term Insurance: What is its Importance Later in Life?

Term insurance is normally bought by people in their 20s or 30s. However, older people who are in their late 40s or 50s can also get term insurance for various reasons. If you have young kids or still repaying a loan, getting a term plan later on in life makes a lot of sense. Use an online term plan premium calculator and see how much you will have to pay. This will make it easier for you to choose the best cover to keep yourself and your family financially secure.

Paying the Correct Term Insurance Premium

The term insurance premium is calculated based on various factors. Some of them are:

  1. Your age: A younger person pays a lower term insurance premium as compared to an older person. Thus, your age plays a deciding role here.
  1. Your family history: Your family’s medical history is considered at the time of calculating your term insurance premium.
  1. Your health condition: If you are fit and healthy, your term plan premium will be lower and vice-versa. Your smoking habits are also considered.
  1. The riders you choose: You have the option to add riders to your term policy. Every rider is available at a cost. Hence, the more riders you add, the more premium you have to pay.
  1. The volume of the cover: A term insurance plan offers a pure life cover which you pay for. Therefore, the premium is more when your coverage amount is more, and it is low when your cover is lower.

Use a term plan premium calculator to determine the premium amount, depending on your profile and the coverage you choose.

The Final Word

It is important to know what term insurance is as only then you can understand why you need it. Once you decide to get a plan, calculate your term insurance premium. You will then be able to get the best cover at the best rate and stay protected.

Leave A Reply