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What should be the tenure of my term insurance policy? | FAQ #32
Dec 05, 2017 | 631 VIEWS
Let us handle this a bit differently. We’ll talk about what the ideal answer is and also what most people think and do. Not judging anyone as there is no completely wrong answer here.

Ideally, one should take term insurance till their working age - well may be for a few years after the age of retirement. So for most people, the policy term should end when the policyholder is 60 or 65 years old. The idea here is that term insurance is a sort of financial protection - in case something happens to you and your income stops, there should be some solid financial protection against such a scenario. Term insurance does just that. So logically, once you are past your earning age, you really don’t need term insurance. You could save on the premiums you have to pay for the term insurance cover when you are no more earning. 

Now one tends to think a bit more smartly. I am past my earning age and nothing has happened to me and what is the harm in continuing with the cover by paying the premiums? In case something happens to me, my family will get a large amount of money. Well it is true - just that a higher term will mean that the premiums will be higher throughout the term of the policy for the same amount of cover. Also you may not want to be paying these premiums during your retirement days from your savings. One strategy is to take a longer term - say till the age of 75 years and take a call whether you want to continue with the plan when you hit your retirement age. Yes, you will end up paying higher premiums but at least you retain an option to cover your life till a much higher age.

I hope this answers the question on what tenure should be taken with your term insurance plan. Ok, so now start comparing to get the best term insurance plan.

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