It is widely recommended that everyone should consider getting life insurance, but many people are not very interested in it.
Term life insurance is a financial tool and a source of peace for families. It provides crucial support in the event of an unexpected loss of the primary breadwinner, ensuring that the family’s financial needs are met.
Term life insurance offers a substantial amount of coverage at a low premium. When is the best time to buy term life insurance, and when are the premiums lowest? Let’s find out.
Experts strongly recommend purchasing term life insurance as early as possible. This proactive step provides immediate protection and secures long-term benefits, making it a wise and forward-thinking decision.
Insurance companies offer term insurance policies with coverage amounts of Rs.50 lakh, Rs.1 crore, and higher. According to the HDFC Bank website, if you take out a term life insurance policy for Rs.1 crore at 25, the annual premium will be Rs.16,348, which amounts to Rs.1360 monthly. However, the annual premium increases slightly with age.
The annual premium for a 30-year-old purchasing a term insurance policy with coverage of Rs.1 crore will be up to Rs.20,100. For a 33-year-old, the premium will be up to Rs.24,820.
Likewise, at age 35, the premium for a term life insurance policy with coverage of Rs.1 crore will be up to Rs.27,850, and this premium must be paid until age 65.
A 35-year-old would pay a total of Rs.11,14,120 over 30 years. If the policy were purchased at 25, the total premium for the remaining 40 years would be only Rs.6,53,920. This represents significant savings.
Some older insurance companies have strict rules, especially for large coverage amounts, and most exemptions are given to those who take out policies at a young age.
Policyholders play a crucial role in the insurance process by fully disclosing all their health and financial details.
This responsible action ensures that the annual premium is calculated accurately. It also highlights the significant difference in premiums for smokers and non-smokers, empowering individuals to make informed decisions.