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What is the best age to buy Life Insurance?
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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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One thing which the year 2020 has taught everyone across the globe is - life is uncertain. With people realizing the importance of keeping themselves safe and their loved ones protected, the need and demand for insurance started going up. Life insurance offers life cover to the policyholder and safeguards the loved ones against the financial pitfalls caused by the insured’s demise.
If you have financial dependents, then being covered with a life insurance policy is crucial in current times. You may know that buying insurance is wise, but do you know the exact age at which you should buy insurance? Let us have a look.
What is Life Insurance?
In simple terms, a life insurance policy is a contract between the insured and the insurance company. The insured agrees to pay a pre-determined amount as per the laid down terms to the insurance company. This is known as the insurance premium. In return, the insurance company agrees to pay a pre-determined amount to the appointed beneficiary of the insured in the event of the insured’s death. This payout is known as the death benefit.
Some life insurance policies also pay a maturity benefit to the insured, if the insured survives the life insurance term period.
The life insurance premium is determined by a number of factors; however, the most important factor that affects the life insurance premium is the age of the insured.
This means that if you are buying life insurance, it is advisable to buy it at a young age to enjoy lower premium prices and longer coverage.
What is the Right Age to Buy Life Insurance?
When it comes to buying life insurance, industry experts have always maintained, “The younger, the better.” When you are young, you get lower premiums and longer coverage. So, buy a life insurance policy the moment you are gainfully employed and start earning. Earmark a part of your first salary towards your first premium.
If for any reason, you did not buy life insurance in the early stages of your life, you can buy it when you have family members depending on your salary. Determine the number of years they will need your salary and buy a life insurance policy that will take care of their needs after your demise.
Again, it is fine if you didn’t avail a life insurance policy in the early stages of your life. But it is imperative to get one if you have availed a major loan (home loan, vehicle loan) and do not want your family to be burdened by the repayment after your demise. Calculate the value of total financial liabilities and get a life insurance policy that will pay-off the loans to ensure financial safeguard for the family.
Buying insurance at an early age (probably in your 20s or 30s) has numerous benefits. Let us enlist those benefits for you below:
If you are young and healthy, you are less likely to have any chronic disease. Insurance companies are aware of this factor and hence charges lesser premium rates to young individuals.
Life insurance policies have varying terms and can go up to whole life coverage. When you buy life insurance at a younger age, you are covered for a longer duration.
How to Buy Best Life Insurance Plan?
We list below some features which you must watch out while opting for a life insurance plan:
Conclusion
In challenging times like these, it would be best to opt for life insurance at the earliest to financially safeguard your family and loved ones, even in your absence.
Disclaimer:
BEWARE OF SPURIOUS PHONE CALLS AND FICTITIOUS/FRAUDULENT OFFERS.
IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.
Kotak Mahindra Bank Ltd is a corporate agent of Kotak Mahindra Life Insurance Company Ltd. with Corporate agency License number - CA0250. Regd. Office 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai - 400051. The plan is offered and underwritten by Kotak Mahindra Life Insurance Company Ltd. Participation of customers of Corporate Agent shall be purely on voluntary basis.
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