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When is the Right Time to Buy Term Insurance

  7/1/23 5:56 AM

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Term insurance is the cornerstone of efficient financial planning. Financial advisors often recommend working professionals who have financial dependents to invest in a term plan to ensure financial stability against unpredictable scenarios.

There is often a misconception associated with buying a life insurance term plan that it is essential only when you are 35 years of age or older. Contrary to popular belief, it is better to buy a term plan when you are younger, especially early to mid 20s, as the cost of cover is comparatively lesser. You can even check the cost of your insurance before you buy a term plan online using the free term life insurance calculator available online.

If you are looking to ensure financial stability for your loved ones at cost-effective premiums, buying online term insurance is a valuable tip.     

When is the Best Time to Buy Term Insurance?

Several potential investors are unaware of the term insurance benefits that come with early purchase. The prospects of early investments can help reap the benefits when you are older and more susceptible to health risks.

When a life cover term plan is purchased early in life, the premium amount is significantly lesser. To quantify, when a term plan is purchased early in life, the premium amount is half of what it would be 10 years down the line for the same life cover term plan.

Additionally, the term insurance tax benefit makes its purchase a wise buy early on in your career. Under Section 80(C) of the Indian Income Tax Act, the premium paid for the life insurance term plan is eligible for a deduction of up to ₹1.5 lakhs. You can maximise your savings when you buy a term plan online. 

To help you with your term insurance purchase, here is an analysis of your insurance requirements at different milestones and age:

1. Single in the Early 20s

With changing marriage preferences, the responsibility of a spouse and child is pushed further in life. However, because your expenses are comparatively lower at this phase of life, you can start building a corpus for your future. Moreover, just because you are not married does not mean that you don’t have financial dependents. To secure the financial future of your loved ones, it is recommended to buy a life insurance term plan during this phase of your life. The term plan purchased during this phase is cheaper, which can be affirmed through a term life insurance calculator that is freely available online. Additionally, buying online term insurance can help you compare term plans to find the most suitable one for your lifestyle. You can even avail yourself of the term insurance tax benefit with an early insurance purchase.

2. Married in the Mid to Late 20s 

Marriage marks a new phase in life. Newlyweds need to start creating a financial cushion for a potentially growing family. Your former purchase of basic term insurance will need to be enhanced through add-ons to ensure comprehensive protection against unfortunate eventualities in life.

When you have a child, your responsibilities grow further, and you have to think of the cost of their education, medical expenses, and other miscellaneous costs. During this phase in life, your financial milestones start to get more defined, and these can go for a toss in the absence of an adequate term plan should something happen to you. You also need to ensure that even in your absence, your long-term debts such as a house loan or a car loan are compensated so that your family’s financial standing remains stable.

3. Retirement Planning

When you are close to retirement, it is essential to ensure the financial backing that will suit your lifestyle. As your working income will stop in a few years, you need to ensure that your former investments can support your retirement years. Moreover, your liabilities such as paying for the higher education of your children or their marriage come with a hefty cost associated with them.

Although no one likes to consider grim scenarios, a premature demise can leave your spouse and family on financially unsteady grounds. To prevent this, prior financial planning is imperative. As an investor, two crucial factors need to be considered before you buy a term plan online or in-person:

  • The Death Benefit: The sum assured, or the death benefit, refers to the amount that will be paid to the beneficiaries of the policyholder in the event of the latter’s untimely demise. This cover must be adequate to support the lifestyle of your family even in your absence. You need to factor in rising living costs and inflation before deciding the right sum assured.
  • Policy Tenure: Based on your lifestyle, you need to ensure the right duration of your term insurance so that the term plan can promise a cover during the most vulnerable phase of your life.  

Zindagi Plus – The Edelweiss Tokio Term Plan

The Edelweiss Tokio Life Zindagi Plus plan is flexible term insurance that is specially curated to ensure a happily ever after. To cater to changing insurance needs, Edelweiss Tokio constantly innovates its offerings to ensure the best financial results for customers. Some of its unique benefits include:

  • The better half benefit for an additional cover of up to 50% for your spouse
  • Life + COVID-19 cover to protect you from unforeseeable circumstances
  • Flexible premium payment options for policy customisation
  • No medical option for a sum assured of up to ₹99,99,000
  • Discount on the premium amount when you opt for a higher sum assured

Aside from the aforementioned, through its offerings, Edelweiss Tokio enables and encourages you to grow your wealth while strengthening the financial foundation of your family.

To conclude

Financial advisors recommend the early purchase of term insurance for a seamless financial future. Typically, the best rates of insurance are when you are in your early to mid-20s. Aside from saving on money, several benefits come with the early purchase of life insurance. With early insurance purchase, you can use the power of compounding (re-investment of income) to work in your favour.


Swati Tumar  - Travel & Finance Writer

Swati is a Writer in the day and an illustrator at night. Among her interests, she is quite fond of art and all things creative. She often indulges herself in creating doodles, illustrations, and other forms of content. She identifies herself as an avid traveler and shameless foodie.

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