In today's time, almost everyone owns a vehicle. It is almost a necessity. And, whether you operate a two-wheeler or a four-wheeler vehicle, having a valid driver's licence is a legal requirement. It acts as an identification document and authorises you as a licensed driver. However, there is an age limit to own a driving licence. You need to be at least 18 years old to drive a car on Indian roads.
In the same way, you have to meet the mandatory age criteria if you wish to buy a term plan. So, what is the minimum and maximum age limit? Let’s find out in this article.
What is Term Insurance?
If you are the sole breadwinner of your family, your untimely demise might leave your loved ones in an emotional and financial bind. In such a scenario, a term insurance plan will be a lifesaver.
Under a term insurance plan, in case you pass away during the policy term, the insurer will pay a fixed sum of money known as the ‘sum assured’ to your family members. Your loved ones can use this money to take care of their financial needs and goals such as paying off loans, covering children’s education, everyday expenses, etc. It acts as an income replacement so your loved ones can achieve their aspirations and milestones without hampering their lifestyle.
The money can be availed as per the claim payout option chosen while purchasing the policy. However, to enjoy the coverage, it is mandatory to duly pay all the premiums.
But, since term insurance is a pure risk insurance cover, you won’t receive any benefits if you survive the policy term.
For instance, Kavita purchases a term plan with a sum assured of Rs. 35 Lakhs for a policy duration of 15 years. If she passes away during the policy period, her nominee will receive the death benefit. On the other hand, if she lives past the policy duration of 15 years, she will not receive any benefits under the policy.
What is the Age Limit to Buy a Term Plan?
To buy a term insurance plan, you should be within the age limit stipulated by the insurer.
The minimum age required to purchase a term insurance plan in India is 18 years.
The maximum age limit of the term insurance plan may differ from insurer to insurer. For instance, some insurers may allow you to buy a term plan at the age of 60 years while others may allow you to buy it even at the age of 65 years.
Why Should You Buy Term Insurance?
A few reasons why you should consider purchasing a term insurance plan -
1️⃣ It is the simplest form of life insurance
A term plan is technically one of the most basic types of life insurance. In case of your unfortunate demise during the policy term, it pays a fixed sum of money to your family. This money can be used to fulfil their long-term and short-term goals such as loan repayment, funding children’s education, monthly bills, wedding expenses, etc. To receive the benefits of the policy, all you need to do is duly pay all your premiums.
2️⃣ It has affordable premiums
The premiums of term plans are very easy on the pocket. For instance, if you purchase a Rs. 1 crore term insurance plan, it will cost you as low as INR 900 per month. Which translates to your family getting about Rs. 1000 back for every rupee you invest.
3️⃣ It offers financial protection to your loved ones
Your family might be dependent on you for various financial needs, like bill payments, loan instalments, tuition fees, and so on. If something happens to you, how will they take care of these expenses? How will they fund their dreams?
This is where a term plan helps you. It is a sort of financial cushion that will soften the blow of your passing away. It will ease their financial burden, especially when they have to go through the added mental distress of not having you around. They can use this money to fulfil their short-term goals (rent, monthly bills, everyday expenses) and long-term goals (children’s education, wedding expenses, etc). It will basically help them realise their dreams and wishes without having to worry about maintaining their lifestyle.
4️⃣ It offers a volley of customisation options
A term plan offers you many customisation options and you can tailor your policy depending on your family’s needs and requirements. For instance,
?You get the option to customise your premium payment duration. You can choose the limited pay option if you want to settle your premiums in a shorter period of time, say 10-15 years.
?You can choose the increasing cover feature if you want your term insurance cover to automatically increase with time.
?You can also configure how you want your family to receive the claim amount. For example, you can choose the monthly payout option if you want your family to receive the claim amount as monthly instalments.
5️⃣ It covers almost every type of death - globally
A term plan covers all types of death globally, whether it’s due to natural causes, accidents, illnesses, war, etc. However, there is an exception - if the death is due to suicide in the first year of purchasing the policy, the plan will not cover it. In this case, the nominee will receive a refund of the paid premiums and not the sum assured.
6️⃣ It gives you a 3-year claim payout assurance
Section 45 of the Indian Insurance Act states that the insurer cannot investigate or deny a claim on the grounds of -
- Suppression of facts
This section comes into play if the term plan has been active continuously for 3 consecutive years. Your family is eligible to receive a guaranteed claim amount if the policy completes 3 years as long as you pay the premiums on time.
7️⃣ It gives you attractive tax advantages
Under the Income Tax Act of India, 1961, a term insurance plan is eligible for tax benefits for both the premiums you pay and the claim amount your family receives.
- Section 80C
Tax deductions of up to Rs 1,50,000 for the term insurance premiums you pay every year.
- Section 10(10D)
Exempts the claim amount your family will receive in case of your unfortunate demise from taxation.
The minimum age requirement to buy term insurance is 18 years. So, it is recommended that you buy the policy as early as possible if you have or envision financial obligations and dependent family members. Term insurance is a good investment choice if you want your loved ones to live a comfortable life without any financial worries when you are no longer around them.