Term insurance comes with its set of rules and regulations, one of which is the age at which individuals can enrol in an insurance plan. There are both minimum and maximum age requirements that potential policyholders must meet.

The minimum age limit for term life insurance is 18 years. On the other hand, the upper age limit for obtaining a term insurance plan is set at 65 years. However, the term insurance age limit is not one-size-fits-all. Term life insurance age limit varies from plan to plan and usually falls within the range of 18 to 65 years. Some term insurance policies, such as senior citizen term insurance, may also extend their coverage beyond age 65.

How Does Age Affect Term Insurance?

Premium Costs

The age of the applicant can influence the premium of a term insurance plan. Younger applicants qualify for lower premiums compared to older ones.

Maximum age of entry

Insurance companies impose a term insurance age limit for applicants. The maximum age of entry is typically 65 years. Beyond this age, individuals may not qualify for insurance.

Coverage Limit

Younger people have a longer life expectancy, which qualifies them for higher coverage. In comparison, it may be hard for older applicants to get the same amount of coverage from term insurance.

Tax-savings

While the annual tax^* benefits of term insurance remain the same across all age groups, starting a policy at a younger age can amplify these savings over the long term. Consequently, younger individuals may be able to save more over the years.

What are the key factors that affect eligibility criteria for Term Insurance Plans?

Age of the policyholder

Term insurance plans have an eligibility criterion for applicants when it comes to age. Typically, the maximum age limit for term insurance is 65 years, while the minimum is 18.

Citizenship/Residency

Indian citizens, Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), Overseas Citizens of India (OCIs) and foreign nationals are eligible to buy life insurance in India.

Health status

Term insurance companies conduct a medical test to ensure the applicant is in good health before selling the plan. Pre-existing conditions can affect your eligibility to purchase insurance. They may impact the plan’s terms and premium. In some cases, they can also lead to rejection of the application.

Financial status

Insurers assess your ability to pay the premium by verifying your income and employment status. They may approve or reject your application based on these factors.

How to pick the best term insurance plan for your age?

For Young Adulthood (20s and 30s)

Young adults in their 20s and 30s can select a term plan with high coverage. This can ensure complete financial security for their family against financial emergencies and help them cover their essential and non-essential needs.

For Middle Adulthood (40s and 50s)

Individuals in their 40s and 50s can select a term plan that offers a cover that is higher than their annual income. This can help cover debts and other expenses. A level term insurance with a fixed premium and sum assured throughout the term may be useful for these age groups.

For Late Adulthood (60s and beyond)

A decreasing term insurance plan where the sum assured decreases with age may be suitable for individuals in their 60s and beyond.

Why should you buy a term plan at an early age?

You can buy a term insurance plan much later in life too. However, the benefits of purchasing it sooner can be substantial. Here are some reasons why you should buy a term plan at an early age:

Flexibility

Buying a term plan at an early age provides you with protection against several eventualities and the flexibility to change your term plan as and when required by adding riders, increasing your sum assured, and other features

Low premiums

The premiums for term insurance increase with age. Since the chances of falling sick are low when you are young and tend to increase as you age, you are considered a low-risk candidate by the insurance company in your 20s or 30s. As a result, you can buy a high sum assured at a comparatively low premium. For instance, the ICICI Pru iProtect Smart Plan offers a high life cover^` at an affordable premium. The plan also offers additional riders such as critical illness^# rider (optional), accidental death benefit^{^} rider (optional), waiver of premium in case of permanent disability^{^^} and terminal illness^## at nominal costs and a life cover till the age of 99, among other things

High sum assured

Investing in term insurance from a young age will enable you to opt for a significantly higher sum assured. One of the most substantial benefits of purchasing term insurance early is that premiums tend to be considerably lower when you are younger. This helps you get higher coverage at a relatively affordable cost.

Financial stability

Life is inherently uncertain, and unexpected events can disrupt your financial plans. Investing in a term insurance plan early on creates a safety net for your family. This ensures they are not burdened with financial hardships if you are no longer there to provide for them.

Financial discipline

Term insurance is a long-term commitment. Buying it early on helps you establish financial discipline. It instils a habit of financial consistency as you pay regular premium payments. This further enables you to save and manage your finances.

Conclusion

Term insurance is a vital financial tool that offers protection for your loved ones in the event of your untimely demise. However, as you approach the age of 65, the range of available plans may narrow down. Many term insurance policies also include an age limit of 65 years. Therefore, purchasing term insurance earlier in life is generally a wise decision.