Entry Age for Term Insurance
Confused about the entry age requirements for Term Insurance? Learn what it is and how it can affect your coverage options and premiums.
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Understanding the Entry Age for Term Insurance
Term Insurance (TI) can be understood as an agreement between the insurance company and the policyholder that provides financial coverage to the insured for a specified period, i.e., a specified term (for example, 10, 20, or 30 years). If the policyholder faces an untimely death during the specified term, the insurance company will pay a death benefit according to the policy terms. Term Insurance policies are often referred to as the purest form of life insurance plans and have some age limits.
What is a Term Insurance?
Term Insurance is a kind of life insurance that offers protection for a predetermined amount of time, or "term" (e.g. 10, 20, 30 years). The insurance company gives the beneficiaries a death benefit, which is a lump sum payment if the policyholder dies during the term. The policy normally expires unless it is renewed or converted, and no benefit is provided if the policyholder lives out the term.
Key Features of Term Insurance
Affordable Premiums: It is the most cost-effective form of life insurance because it provides pure protection without any savings or investment component.
Fixed Term: Coverage is for a specific period, such as 5, 10, 15, 20, or more years.
High Coverage: Policyholders can get a large sum assured (death benefit) at a relatively low cost.
No Payout on Survival: Unless it is a special type (like the return of premium policies), there is no maturity benefit if the policyholder survives the term.
Customisable Riders: Many term policies offer additional riders, like accidental death coverage, critical illness, or waiver of premium benefits.
What is the Entry Age for Term Insurance?
The age limit for Term Insurance varies by insurer and plan, but there are general guidelines. Typically, the minimum entry age is 18 years, though some insurers allow individuals as young as 16 to purchase a policy, provided they have a source of income or parental consent. This ensures young professionals or early earners can secure affordable life coverage.
On the other hand, the maximum entry age for Term Insurance generally ranges between 55 to 65 years, depending on the insurer. At this stage of life, premiums are significantly higher due to increased health risks and shorter life expectancy. For those purchasing policies later in life, insurers may also require comprehensive medical examinations to assess eligibility.
Regarding the maximum maturity age, policies usually extend coverage until 70 to 80 years, but some whole-life term plans offer coverage up to 99 or 100 years. This makes them a suitable choice for those who want lifelong protection. However, older applicants often face limitations on policy term lengths. For example, a 60-year-old buying a term plan may only get a 10- or 15-year term since insurers design policies to mature before their cutoff age.
It’s important to note that purchasing Term Insurance earlier in life is advantageous. Premiums are lower, and it’s easier to secure longer coverage without stringent health requirements. Delaying the purchase, while still possible, can make it more expensive and limit the benefits. Understanding these age-related factors helps individuals make informed decisions about when and how to purchase Term Insurance.
How Does Term Insurance Work?
Different insurance companies offer different types of Term Insurance plans. Insurers first calculate your premium based on factors, including the term you select, your age, overall health, and life expectancy. Hence, a medical history report will be required when buying a term insurance plan. Here, the premium and the time period are usually fixed. In case of an unfortunate event during the insured term, a death benefit is paid to the beneficiaries.
There are options to renew your Term Insurance or extend the period, but the premium you have to pay will majorly change depending on your age at the time of renewal. Therefore, renewal premiums are generally higher.
Moreover, many Term Insurance plans are convertible, i.e., they can be converted to Permanent Life Policy plans.
It is better to invest in Term Insurance at an early age as the premium increases with your age. This is because, with increasing age, your life expectancy reduces, and you might suffer from some common medical conditions like thyroid and diabetes. This makes getting a Term Insurance plan difficult as you age.
Advantages of Term Insurance
Here’s a detailed breakdown of the advantages of Term Insurance.
1. Affordable Premiums
Explanation: Term Insurance offers the highest life coverage for the lowest premium because it focuses solely on providing protection (no savings or investment component).
Example: A 30-year-old individual can secure a ₹1 crore policy for as low as ₹500-₹1,000 per month, depending on the insurer and policy term.
2. Simple to Understand
Explanation: Term Insurance is simple. In addition to paying regular premiums, your beneficiaries will get a lump sum death benefit if you die within the policy's term.
Why It’s Good: No complicated returns, investment risks, or bonus calculations—just pure life coverage.
3. High Sum Assured
Explanation: Policyholders can opt for a significantly high coverage amount, ensuring their family’s financial needs (education, housing, etc.) are met.
Example: For a family’s future expenses (including children’s education), a ₹1 crore term plan is more affordable than other life insurance options.
4. Financial Security for Dependents
Explanation: The death benefit ensures that your family can manage expenses, clear debts, and maintain their lifestyle in your absence.
Why It’s Good: It safeguards against the financial impact of the policyholder’s death.
5. Flexibility
Explanation: Many term plans come with options for customisation, such as:
Increasing coverage over time (to match inflation or life events like marriage/childbirth).
Adding riders like accidental death benefit, critical illness, or disability coverage.
6. Tax Benefits
Explanation: Term Insurance provides tax savings:
Under Section 80C, premiums paid are deductible from taxable income (up to ₹1.5 lakh annually).
Under Section 10(10D), the death benefit received by the nominee is tax-free.
7. Convertible Option
Explanation: Some term policies allow you to convert them into whole-life or endowment plans during the policy tenure, offering more flexibility as needs evolve.
Disadvantages of Term Insurance
1. No Survival Benefit
Explanation: If you outlive the policy term, there is no payout or return of premiums (unless you have opted for a "Return of Premium" rider, which increases costs significantly).
Why It’s a Drawback: Unlike savings-linked policies, it doesn’t provide any maturity benefit, making it purely a risk-management tool.
2. Premium Increases with Age
Explanation: The younger you are, the cheaper the premiums. However, if you buy or renew Term Insurance at an older age, premiums can increase significantly.
Example: A 30-year-old may pay ₹10,000 annually for a policy, but at age 50, the same coverage might cost ₹40,000 annually.
3. Limited Coverage Period
Explanation: Term Insurance only provides coverage for the chosen tenure (e.g., 20 or 30 years). If the policyholder outlives the term, the policy expires with no benefits.
Why It’s a Drawback: This could leave individuals over 60 without life insurance when they might still have financial liabilities.
4. No Wealth Creation
Explanation: Unlike endowment or ULIP policies, Term Insurance doesn’t have a savings or investment component.
Why It’s a Drawback: For those looking for dual benefits—protection and wealth growth—Term Insurance falls short.
5. Misuse of Riders Can Increase Costs
Explanation: Riders like critical illness or return of premium add to the cost of the policy. If chosen unnecessarily, the overall affordability diminishes.
Example: A base policy might cost ₹10,000 annually, but adding riders could increase the premium to ₹15,000 or more.
6. Lapses Due to Non-Payment
Explanation: Missing premium payments can lead to policy lapse, with no return on the premiums already paid.
Why It’s a Drawback: Unlike investment-linked policies that have surrender value, Term Insurance lapses entirely.
7. Inflation Risk
Explanation: A policy chosen today may not account for the rising cost of living. For instance, ₹1 crore may not suffice 20 years later.
Solution: Opting for an inflation-linked or increasing coverage plan is crucial.
Is Term Insurance Right for You?
Term Insurance works best for:
Breadwinners: To secure dependents financially in case of an untimely demise.
Young Professionals: Who want affordable coverage early in their career.
Individuals with Loans/Debts: Ensures liabilities like home loans don’t burden the family.
Cost-Conscious Buyers: Looking for maximum coverage at a minimal cost.
Why Term Insurance?
As discussed above, you can buy a Term Plan anytime between 18 and 65 years of age. However, it is believed that investing in it at an early age, i.e., in your 20s, is best. Investing at an early age comes with the following benefits.
Low premium amount
Insurance companies consider people in their 20s to be low-risk candidates because the probability of them getting sick at this age is very low. This is why premiums for Term Insurance Plans increase with age.
Flexibility
More benefits
The benefits for people investing early are more than those investing in their 50s or 60s. Hence, it is best to invest in a Term Insurance Policy at an early age to secure the financial needs of your loved ones.
Types of Term Insurance
There are different types of Term Insurance plans in India. These plans have unique features and benefits, such as Tax benefits under Section 80C of the Income Tax Act of 1961 under the old tax regime. It is important to understand each one in order to choose the right term plan based on your needs.
Level Term Plans:
The sum assured remains constant throughout the policy term.
The premiums are highly affordable.
Provides a fixed amount of cover throughout the policy term.
Increasing Term Insurance:
The sum assured increases yearly
The premium for this plan is generally higher than that of the level-term plan because the sum assured increases after each year.
This plan is perfect for young people who have an increasing number of expenses.
Decreasing Term Insurance:
Coverage decreases over the policy term.
Premiums remain constant throughout the policy term.
Lower premiums compared to other life insurance types.
Beneficiary receives a decreasing payout upon death.
Term Insurance with Return of Premium:
Allows policy renewal at the end of the term without medical underwriting.
Renewal premiums increase based on the insured's age at renewal.
Pays out a fixed amount upon death during the term.
There may be limitations on the number of renewals or the maximum age for renewal eligibility.
Convertible Term Plans:
This plan allows the policyholder to convert their coverage to a Permanent Life Insurance Policy.
The policy offers guaranteed insurability as long as the policy is converted within the specified time frame.
The cost of this plan might be slightly higher compared to the other types of Term Insurance.
Choosing Term Insurance: Tips and Guidance
Consider these age-specific Term Insurance tips when choosing a plan.
For Young Professionals: Aged 20 to early 30s
Premiums are lower when young and healthy.
Young professionals typically have longer working years ahead. It would be ideal to consider policies that provide long-term coverage, such as policies that span 30 years.
Evaluate probable future obligations, which may include marriage, purchase of a home, and more.
Consider adding critical illness riders or accidental death riders. These provide additional coverage against health issues or accidents.
For Middle-Aged Individuals: Late 30s to 50s
It is critical for middle-aged individuals to balance the need for coverage with affordability.
Consider remaining financial obligations such as children’s education or mortgage payments. Select a policy term that encompasses these needs till the age of retirement or until certain sizable liabilities are met.
Premiums increase with age, and health conditions become more relevant as individuals age. It is important to disclose all health details correctly at the time of policy application to avoid complications at the time of claim.
Consider policies with conversion options to permanent life insurance.
Review existing policies to ensure they still meet current financial needs.
For Individuals Nearing Retirement: 50s and above
Analyse the term insurance requirements based on the fact that the dependents still require support.
Other options include short-term policies or perhaps a permanent life policy.
Health issues may become more prevalent. Thus, premiums for new term policies can be significantly higher at older ages.
Why Choose ACKO Life Flexi Term Plan?
The ACKO Life Flexi Term Plan is a pure term plan from ACKO, known for its unmatched flexibility and affordability. With the ACKO app, you can make easy and convenient purchases, renewals, and even file claims. It is a unique and reliable option for people who want an extensive and flexible Term Insurance plan.
Key Advantages: ACKO Life Flexi Term Plan
Adaptable Policy Duration | Budget-Friendly Premiums |
Adaptability in Sum Assured | Will Creation Services |
Highly Effective Riders | Adaptable Payout Options |
ACKO Life Flexi Term Plan: Entry AGE
The entry age is 18, and the maximum entry age is 65. Coverage is offered until the age of 70. Please note that details may change, so we recommend checking the latest policy documents or contacting ACKO for updates.
3 Unique ACKO Term Insurance Riders and Their Benefits:
Riders are optional benefits that can be added to a basic life insurance policy. ACKO provides three unique riders:
1. ACKO Life Accidental Death Benefit Rider:
One of the most affordable riders that provides an additional amount of money if the policyholder’s death is caused by an accident.
2. ACKO Life Accidental Total Permanent Disability Benefit Rider:
If the policyholder becomes permanently unable to work due to a major accident, this Accidental Total Permanent Disability (ATPD) rider will provide an additional amount to cover day-to-day expenses. Additionally, it will waive all future premiums of the ACKO Life Flexi Term Plan.
3. ACKO Life Critical Illness Benefit Rider:
If the policyholder gets seriously ill, this unique rider provides a predetermined amount of money. It will also waive all future premium payments that are due for the ACKO Life Flexi Term Plan.
List of Covered Critical Illnesses
Cancer of Specified Severity | Benign Brain Tumor |
Myocardial Infarction (First Heart Attack Of Specific Severity) | Blindness |
Open Chest CABG | Deafness |
Open Heart Replacement Or Repair Of Heart Valves | End Stage Lung Failure |
Coma Of Specified Severity | End Stage Liver Failure |
Kidney Failure Requiring Regular Dialysis | Loss Of Speech |
Stroke Resulting In Permanent Symptoms | Loss Of Limbs |
Major Organ /Bone Marrow Transplant | Major Head Trauma |
Permanent Paralysis Of Limbs | Primary (Idiopathic) Pulmonary Hypertension |
Motor Neuron Disease With Permanent Symptoms | Third Degree Burns |
Multiple Sclerosis With Persisting Symptoms |
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ACKO Health Insurance for Senior Citizens
Acko offers health insurance plans tailored for senior citizens, emphasizing affordability, comprehensive coverage, and ease of access. These plans are ideal for individuals above 60, including options for those over 70 or even 75 years old, ensuring financial support during medical emergencies.
Key Features of ACKO Health Insurance for Senior Citizens:
Comprehensive Coverage: Plans like the Acko Platinum Health Plan offer high sum insured options (up to unlimited coverage) with benefits like zero co-payment, no room rent limits, and cashless hospitalizations at over 14,300 hospitals in India. These features are particularly beneficial for managing large medical expenses.
No Waiting Period (in Select Plans): Some plans, such as the Platinum Health Plan, eliminate waiting periods, allowing immediate access to benefits for covered treatments.
Add-Ons and Customisation: Senior citizens can enhance their coverage with add-ons like critical illness protection, outpatient department (OPD) covers, and domiciliary treatments.
Affordable Premiums: Acko minimizes administrative costs by offering policies directly through its digital platform, making premiums competitive while retaining robust benefits.
Senior-Specific Benefits: Plans address age-related needs, including pre-existing conditions (post-waiting period), lifetime renewability, and comprehensive coverage for new-age treatments, pre- and post-hospitalization, and critical illnesses.
Advantages:
Ease of Access: The digital platform simplifies policy purchase, renewals, and claims with minimal paperwork and direct processing.
Financial Protection: Coverage is designed to minimize out-of-pocket expenses, especially for high-cost treatments.
Considerations:
Premiums and Deductibles: Premiums may increase with age, but selecting higher coverage ensures sufficient financial security.
Terms and Conditions: Age limits and waiting periods vary by plan; it’s essential to review these details before purchase.
What are the Cases that are Not Covered by Term Insurance?
There are 8 cases of death that are not covered by Term Insurance.
The case of murder. The claim is not settled if the insurer was murdered by the nominee or if the insurer was murdered due to his involvement in some criminal activity.
Death cases that occurred under the influence of alcohol are not covered.
When death is caused by extensive smoking, smoking increases health risks and is a common cause of death. Hence, it is essential to disclose your smoking habit at the time of buying the policy. If you do not disclose this habit and it is later revealed that death was caused by extensive smoking, the insurance company will simply decline the claim.
Death caused by hazardous activities like parachuting, hiking, paragliding, etc.
Deaths caused by pre-existing health conditions. For this, you can add a rider to your plan that covers pre-existing illnesses.
Unfortunately, deaths due to childbirth are not covered under Term Insurance plans.
Suicidal deaths are not covered by insurance companies in Term Plans.
Frequently Asked Questions
Here’s a list of common questions and answers related to the entry age and Term Insurance.
What is the entry age for Term Insurance?
Entry age refers to the minimum and maximum age limits within which an individual can purchase a term insurance policy. It typically ranges from 18 to 65.
Can I buy term insurance if I am older than the maximum entry age limit?
No, term insurance policies have strict upper-age limits for entry.
Is there a minimum entry age for term insurance?
Most term insurance policies have a minimum entry age requirement, usually 18 years old.
Can the entry age affect the premium amount for term insurance?
Yes, entry age plays a crucial role in determining the premium amount for term insurance. Younger individuals generally pay lower premiums.
Are tele-medical services for Term Insurance available for all ages?
Most insurance companies have started offering telemedical services, which means that online consultations can now be used for health checks for people of all ages who hold a policy.
What is a rider, and can people of all ages buy it?
A rider is a provision of an insurance policy through which you can add benefits to your existing plan. By adding riders, you can increase the coverage of your Insurance plan. People of all ages can buy riders depending on the applicable terms.
Who is a nominee for the Term Insurance Policy, and is there an age limit?
A nominee is a person who will receive the death benefit in the event of the insurer's untimely death. You can designate your spouse, children, or parents as nominees. Usually, there’s no age limit; however, it’s best to confirm the same by going through the applicable policy wordings.
What’s the maximum coverage I can get for an Accidental Death Benefit rider?
As per the IRDAI, you can purchase an Accidental Death Benefit Rider with coverage up to three times (3x) the base sum assured of your life insurance policy.
What is the Free Look Period for life insurance products?
The Free Look Period for life insurance products is 30 days.
What new options do I have for adjusting my premium?
You have the option to adjust (decrease your premium amount/sum assured) after 3 years, as opposed to the previous restriction of 5 years.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.
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