When is the best time to take a life insurance policy?

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Life Insurance Policy
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When is the best time to take a life insurance
policy?
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Most youngsters ignore life insurance mainly
because of they feel, its not required for them.
They take life insurance simply for the sake of
tax deductions, and often feel neglect its
benefits thinking its not for them. Its quite
natural for them to feel so, especially if they
are away from familial responsibilities. But
remember, taking the same policy at different
stages of your life have different impacts. The
benefit gained from a policy taken at the age of
25, may be lower when the same taken at 40. A 20
year policy taken at the age of 25 would be very
helpful for you during some days of financial
need at the age of 45, like your childs higher
education, whereas the same taken at the age of
40 may not turn out a great help for you at your
60s. Lets have an analysis on the best time to
take a life insurance policy.
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Starting Early Starting out for life
insurance at a young age has immense benefits.
Since life insurance is based on the power of
compounding, the earlier one starts investing,
the lower the premium charges are. Another
advantage of starting out young in life is that
youngsters being fit and healthy do not require
any medical checkups. Depending on the type of
life insurance plan one opts for, life insurance
offers multiple financial benefits along with the
protective cover in case of any misfortune or
sudden demise of the individual. Cost of Life
Insurance Postponement   The earlier one buys
a life insurance policy, the lower is the
premium. The best time to buy a life insurance
plan is when a person is younger and fit so that
he or she can easily earn and save some small
amount as life insurance premium. Term
insurance plans are well suited for youngsters.
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Cost of Life Insurance Postponement   Let us
understand the advantages of starting out young
with an example. Let us assume that an individual
opts for a term insurance life cover of Rs.1
Crore at the age of 30 years. Since most term
insurance policies expire at the age of 60, the
individual will have a policy term of 30 years.
The same person if he or she waits another five
to ten years till he reaches 35 or 40 years of
age reduces the policy term significantly thereby
increasing the annual premium amount
substantially.
Age 30 Years 35 Years 40 years 45 Years
Cover Rs 1 Crore Rs 1 Crore Rs 1 Crore Rs 1 Crore
Policy Term 30 years 25 years 20 years 15 years
Approximate Annual Premium Rs. 10,600 Rs.12,600 Rs. 16,200 Rs. 22,200
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Life Insurance Post 60 Most insurance companies
offer life insurance up to 60 or 65 years of age
but if your family is still dependant on your
earnings, it makes sense to consider insurance
post 60 as well. Some insurance companies have
now started providing life insurance for senior
citizens who are still earning well in their
60's. Buying life insurance late in life in not
cheap as advocated in the article above.
Dedicated senior life insurance plans are offered
by various insurance service providers for people
above 60 with premium paying term till 90 years
of age. Senior citizen life insurance
plans however come with various terms and
conditions. Most policies pay out only 25 of the
total premiums paid, in case the policyholder
dies within two years of taking the plan.
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