5 reasons why you should not take Term insurance till 75 yrs !

POSTED BY manish ON April 22, 2013 COMMENTS (173)

Got a term plan for your family? Or may be you’re planning to take the term plan in a few days. If you are, good for you! . One of the biggest questions, every person considering term insurance has, is – “Should I take the cover for the maximum period?” . This is exactly what Chetan also asked on our questions and answers forum

Aegon provides coverage upto 75 years of age. or 20 25 30 35 40 years. I am confused which policy term is better to get maximum benefits?

Just like him, hundreds of investors have asked me this question over and over again, and I tell them, “Just take it only until you reach 60 years of age.”

And they happily ignore my suggestion; as if I am crazy, suggesting this to them. The “Insurance only till 60 years” looks kooky to them – kind of a “wrong deal” and they want to get “maximum benefit” out of the term plan. “The chances of my family receiving the  claim amount is higher when I am covered for long” is the common thought process of every person who is in the mad rush of buying the highest possible tenure.

term insurance plan for higher tenure

Trust me, that’s flawed thinking and I will explain why today. More than a sermon, think of this article as a discussion, where I put some points in front of you and you reflect and ask yourself – “Does it really make sense? or not?” and then make your own decision. So here are those 5 reasons on – why you should not take Insurance till the age of 75 years or more

1. You don’t need it beyond your working life

You really need to ask yourself the question – “Why am I taking Life Insurance?” and the answer is – “Because right now, I don’t have enough net worth, which will help my family if I am gone” or in other words – “Because my family is financially dependent on me.”

For a person who is not earning and does not bring money home, his death will cause family only emotional loss; not financial loss. Hence, logically you need to cover yourself through a life insurance product, only for the time you are working and others are financially dependent on you.

2. You will have “probably” have enough wealth by the time you retire anyway

Stretching the 1st point, if you are taking life insurance cover until you are 70-75 years, will you really need it at that time? Do you really feel that you will have any reason to have a cover of 1 crore that time (after 30-40 years?) . I am sure (more confident than you), that you would have completed all your financial goals by that time, you will have your own home by that time and you will have done everything in your life by that time. You focus area at that old age will be very different than what you focus on right now.

To understand this point, you have to stop for a moment and go into 2040-50; when you are retired and close to the heaven’s door. Are your children really financially dependent on your income – which does not exist? Is your spouse dependent on your income? You must have already accumulated enough wealth by that time and you must be getting some income out of that. Your death has nothing to do with family cash flows at the time.

3. The premium factors in your tenure already

Most of the people who feel that they are smart enough to take term plan till 75 years, forget that on the other side is a professional business running for decades now. They have hired people who are 10 times smarter, who design products (they are called Actuaries) that generate large profits for companies and not investors. Life Insurance is a “for-profit” business. They design things, so that they earn profit. If a company allows you to take a plan that lasts until you turn 75, why have they done that? Why did they allow that to happen? The premiums they charge already factor in everything. You pay premiums to get that term plan, it does not come free!

4. You will live longer – and they already know that.

Like I said in my last point, companies are “for-profit” businesses. They will not issue you a policy if your chances of living beyond 75 is not high. If you are a healthy person, already earning well, have access to good health care, what are the chances you will live beyond 75 years of age? Extremely high, that’s what!

Look around you – Are people dying early on average? No, you see people living beyond 80-85 already and here we are talking about your future which is 30-40 years away, when the average life expectancy of an average person in India would be closer to 73-76 years anyway (as per projections by govt studies.)

Now just imagine this … Compared to the 1.25 billion people in our country, are you in top 25% or lower?

Which means that you have much much better prospects to live beyond 80-85 years.  Which brings me to another point, that you should seriously worry about about your retirement planning a lot more than the less important question of insurance beyond 70-75 years.

Even when we do financial planning for our clients, we make sure that we plan for their retirement beyond 85 years and have them covered only till 60 yrs or even lower if they feel they will retire earlier. The important point to understand here is that, a life insurance coverage is just a support for your family in your early life when you are making money, your financial replacement, if you will. So when a life insurance company issues you a term plan until 75 years, it’s not you who are smart, but the company! They know, with a really high degree of probability, you will keep paying the premiums till 75 years.

It’s all chance. Yes, there will be people who will die before they reach 75 years of age and yes, their family will get a lot of money, but it really is just the game of chances … Companies make profits because of those who will live beyond 75 years and not by those who die before that.

5. The value of your sum assured is peanuts later

I hear it most of the time – “I am taking the term plan till 75 years, so that even if I die, my family will get the money. So, the higher the tenure, higher the chances of making money.” But they forget that by doing so, they are actually helping the insurance guys make profit, but lets say you die at 70 years. Celebrations! Your family will get that 1 crore, which at this moment sounds good, but will not be worth a lot that time.

Let me show you the mirror that lets you look into the future 🙂

Let’s say you are a 30 year old guy, and your monthly expenses are 40k per month. You say to yourself, “Let me take that term plan worth 1 crore so that in case, I die my family can get 1 crore which will provide them some good monthly income.”

It would be very good number if you die early in your life! . With each passing year that 1 crore will be worth less. If you die the next year of taking the term plan, the worth of that 1 crore is pretty much same, 1 crore. But if you die after 10 yrs, that 1 crore will be worth 50 lacs in today’s world. So getting 1 crore after 10 yrs is same as getting 50 lacs right now. Are you getting my point? The money you get in term plan is a constant number, not linked to inflation!

So imagine you have taken the term plan till 75 years and you die at 70 (after 40 yrs of taking the term plan), what is the worth of that same 1 crore at that time? Hold your breath! It’ll not more than 6-7 lacs assuming a inflation of 7% and even if inflation for next 40 yrs is a small 5%, it would not be worth 15 lacs today! . So when your family gets that 1 crore after 40 yrs, it’s kind of worthless. No one would be depending on that money anyway; it’s just a bonus on your children’s inheritance money!

Act like a real informed and smart investor

I have been seeing this madness for many months now and was constantly wondering why people are focusing so much on this small thing called “long tenure” in the term plan. I see investors abandoning one insurance company for another just because the other company is offering a term plan till 75 years.

You are allowing yourself to fall into a trap if you do this. If you have already taken the term plan till 75 years, do not worry … do not cancel it, just let it run it’s course. Stop paying premiums when you feel that your family can be taken care of, by the wealth you have generated. If you are planning to take a term plan right now, take it for as long as it takes you to retire, probably till 55 to 60 years, but not beyond that.

Would be happy to hear your thoughts and your views on this topic! . You have taken the term plan for very high tenure ! .

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173 replies on this article “5 reasons why you should not take Term insurance till 75 yrs !”

  1. Sreenivas says:

    Nice article. I never thought of this kind of thinking. But anyhow my term insurance I have set is to till the age I reach 60.

  2. Christine says:

    I have term life on my husband till he is 80, if he is alive at 80. Does the insurance company pay the amount of the policy .

  3. INDRAJIT SENGUPTA says:

    Manish and others, im 43, working for a pvt firm, having my daughter of 4 years nearing, wife housewife. Now, if I insure till 60 it costs me less than insuring till 80. ( considering a Tata AIA plan which covers till 80 ).

    If i save tge differential by taking it till 60 , and i invest it anywhere- equity, mf or debt, I gain some money.

    What if I die at 61? My nominee does not get the term money and my savings are not so high.

    But a death at 61 will be good for my nominee if I’m covered till max tenure.

    More the tenure, more premium load but more risk covered as chances of death increases and so is the money for nominee.

    If situation permits, one contiues to pay. If not, one stops to pay.

    But it gives the space to feep safe for the nominee.

    What do you all say?

    1. If you are not having that high saving, in that case you can take the insurance for a higher age ! like 80

  4. KESHAV MURTHY says:

    Is The term Insurance option can be used for Bank Housing loan security purpose…..?

    In SBI bank they are insisting loan protection insurance plan for taking home loan transfer….

    pl. guide me in this regard…and which is the best loan protection insurance plan….?

    Thank you…

    1. No, dont take that loan protection insurance and its not mandatory also , Read this – https://www.jagoinvestor.com/2012/12/forced-selling-with-home-loan.html

  5. Mehul Parekh says:

    My DOB is 6/12/1974. I want to buy a term plan for 23 yrs. in ICICI prudential. What is the premium Amt.? Should I buy? My Term is correct or not? I want to retire at 65yrs. Currently I have completed 41yrs. I am confused that which term is proper for me. I want to buy this product for hedgingpurpose because I sold material to my customers on credit basis. please give me reply in detail as earliest. Thanks.

    1. You should go for that. We have help you in getting the right policy if you want

      We think our pro membership will help you as it fits in your requirement. We have various benefits under it like life insurance, health insurance, mutual funds and your financial analysis too..

      Just check out our Pro membership once and schedule a FREE call with us to know more – https://www.jagoinvestor.com/pro

  6. Sameer says:

    I beg to differ. For me having maximum possible term is very important. The fact is after the age of 60, body organs tend to slow down giving rise to different diseases. You might have to undergo hospital treatments more often. Even if you have sufficient health insurance, the reimbursement may not be 100% in every case. Now, if a person who underwent frequent hospitalisation dies but has term insurance cover, the amount reimbursed could help recover hospitalisation cost upto certain extent, at the very least. However, without any longer term policy (say till 75 years) for term insurance, his family will have to bear hospitalisation cost for that person even though he is not contributing to family income. This might cause clashes in family thereby evoking strong reactions after his death. Someone may question the logic behind spending money on a person who has become “liability” on the family than spending on “asset”. I agree with Captain America. But thanks to you as well for throwing light on some of the most unknown yet crucial points relating to term insurance.

    1. Rightthinking says:

      Still term plan beyond an economic life has no value since insurance is to protect the loss of income. Better to take a good health plan and all expenses for terminal illness after death can be paid from the assets one leaves behind withou burdening the children. Net net it is foolish to insure oneself when protection from loss has no meaning…like paying car insurance even after it is junked.

  7. Lokesh says:

    Nice article manish, never thought in such a way, although argument given by captain america was also strong enough, but thanks for your prospective. As i am very much clear and taking the insurance for a smaller term.

    1. Glad to know that Lokesh ..

    2. Hi Lokesh

      I can see that you are thinking of buying a term plan. ALl you need to do is leave your details at https://www.jagoinvestor.com/solutions/buy-life-insurance-plan

      Our team will get in touch with you

      Manish

  8. Krishna says:

    Hi Manish,
    Nice article. Just what i needed since I was planning to buy TERM insurance.

    One question is if you are suggesting to take TERM insurance till 55 or 60 yrs. Why not I do it in parts – I take a TERM insurance policy for only 10 years now and take an other one after 10 years (for again a tenure of 10 years) and so on until i am 55 or 60.

    I feel that the advantages are
    1. Pay less premium initially because of Age and Tenure
    2. Have freedom to opt for a new TERM insurance every 10 years for higher or lower amount next time (considering my financial condition, inflation and insurance company).
    3. I agree that If I am 50 yrs and still taking a 10 yrs policy again i may need to pay hefty premium may look like a drawback but by that time but my income would have also increased proportionally by then.

    Please advise.

    1. Yes you can go with this strategy . The only problem with this is that if you develop some issue in next 10 yrs, after that you wont get the policy !

  9. vaibhav says:

    very useful article..

    I am looking to purchase mutuful funds
    Can you please help ?

    1. Hi vaibhav

      I can see that you are interested in investing in mutual funds. I want to share that now you can invest in mutual funds with Jagoinvestor as your advisor

      We create a FREE online account for you, from where you can invest and redeem online.

      Our team will be happy to explain you more on this.

      Find more at http://www.jagoinvestor.com/solutions/invest-in-mutual-funds
      Manish

  10. Bujji says:

    Hai ,sir. Nice article. ,I want to buy TROP policy. Could u help me??

    1. Hi Bujji

      I can see that you are thinking of buying a term plan. ALl you need to do is leave your details at https://www.jagoinvestor.com/solutions/buy-life-insurance-plan

      Our team will get in touch with you

      Manish

  11. CaptainAmerica says:

    Nice argument.
    Here is what I think.

    Eg plan – Aegon iTerm – SA 1Cr, Term – till 60 or 75 age. (I am 25 now, so 35 yrs term or 50 yrs term). Premium – 7300 (35 yrs term) or 8000/- (50 yrs term)

    I have a compound interest table in excel for calculations. (rate 10%)

    ***I want to buy term plan in any case, atleast till age 60. ***
    So with 7300/-, till 60 age (35 yrs term), 7300/- grows to 21,76,326 (21.7 Lac) in 35 yrs.
    Case A – If I die before 60, – 1 cr. to my family – Good (1 Cr >> 21.7 Lac)
    Case B – If I don’t die by 60 – Loss of 21.7 Lac. But can’t really say this as loss, siince I want protection till 60 anyway. So this 21.7 lac is just a cost of that protection.

    Now I want to buy term plan till age 75. So with 8000/-, till 75 age (50 yrs term), 8000/- grows to 102,42,395 (1 Cr. approx) in 50 yrs.

    Case A – If I die before 75, – 1 cr. to my family – OK (1 Cr = 1 Cr.) No profit/Loss.

    Case B – If I don’t die by 75 – Loss of 1 Cr.? I thought like this.
    1 Cr. is only when I had not bought any term plan at all and only invested 8000/- each yr.
    But since I already said I will buy a term plan atleast till 60, my loss won’t be 1 Cr, it will be less than 1 Cr. Actual Loss = 2,79,598 (8000/- growing at 10% for the extra 15 yrs from 60 to 75)

    Your article was good though and it got me thinking like “If I buy term till 75 age or more, I will end up paying premium of more than 1Cr (considering money growth), until I though as mentioned above.
    Please let me know about any flaw in my thinking, I was just trying to understand the concepts.

    1. Thats surely a way to look at it .. I still suggest look at term plan premium is purely from protection point of view.

    2. PravinJain says:

      Well, all along it is assumed that it is children who needs financial protection in case of my death. What about my spouse who is not earning. Suppose I die at 75 yrs, How she will survive if there is no other income source?

      1. If the person at 75 yrs is bringing the income on which his family (spouse) depends, then even that person should buy the insurance. I hardly know anyone who is 75 yr old and bring income by actively working ?

  12. CaptainAmerica says:

    In the future, just like 1Cr is like peanuts, then an yearly premium of 7500 is also peanuts (say equivalent to Rs 300 (e.g.) of today). So, after 60 yrs age, you’ll need to pay very less money (7500 (equivalent to Rs 300-400 of today)) to continue your cover of 1 Cr. After 60, probability of dying increases because of different diseases (kidney failure, brain hemorrhage) which nowadays happens to even healthy looking people.

    I think, having a choice of 75 yrs or say 70 yrs is good, if at age 60 you think you will survive beyond 75, stop paying the premium and let the term terminate. Invest those 7500 each year after 60 age in 10% investments such as FD and you’ll get 2.62 lakh compound interest at 75 age. If you think you are now too old and weak at 60 age and likely to die before 75, let the policy continue by paying each yr. 7500 (very cheap in the future), and chances are you’ll give your children 1 cr. after you die. Inheritance money!!! Don’t you think having a choice of longer term like this eg. is good? 75 age term gives you a choice in the future. Can’t predict right now what my health will be at 60. Just saying. Please explain.

    I am supposing that 7500 per year won’t much help for my post retirement planning, since value of 7500 is less in future.
    Just my thoughts. Please reply and let me understand more because I am confused betn 75 term and 60 yr term.

    1. Your points are strong enough. It will not make a lot of difference ..

  13. anitha says:

    fantastic article manish..

    1. Thanks for your comment anitha

  14. hitesh says:

    Hi Manish ,

    I am planning to take term plan for my father who is 58 years old and still working. Is it a good option ? Kindly suggest. Our family is not completely dependent on his income . If you are saying No, then please let me know the reason for your No ?

    1. Life Insurance is mainly for people on whom there are financial dependents. He might not get it at first hand for a big sum assured anyways

  15. Brajesh says:

    Nice Article. Even I was about to make this mistake. Now I will not do that.

    Thanks a lot Manish 🙂

    Brajesh

    1. Glad to know that Brajesh ..

  16. Sujay says:

    Excellent points. I would like to mention another reason. Longer the duration of term insurance, larger is the premium amount, and so lesser is the relevance of the sum assured, in combination with the inflation factor.

    1. Thanks for sharing that Sujay

  17. VK says:

    Hi Manish,

    I am planning to surrender all my LIC policies (get 30% refund on premium paid) which were imposed me as per our parents traditional thinking (& also such other attractive options were not available at their time). I want to go for term plans plus other products which offer better returns. Any suggestions?

    1. Yes, why dont you just buy a term plan and invest in mutual funds. If you want, our team can also help you in setting up your MF’s and also recommend term plan. We have special tie ups with companies for our readers

      Check http://www.jagoinvestor.com/start-sip and https://www.jagoinvestor.com/services/life-insurance

  18. Rahul says:

    Should I do term plan of my mother who is 54 yrs old at the moment?

    For 50 Lac term insurance, the premium is 24K for ICICI.

    Please advise

    1. I dont suggest that. Are you financially dependent on her ?

  19. Vishal says:

    Hi Manish,

    I see this post was created 2 years back. Do you still believe that we should have turm plan till 65 ? The reason being what if i want to have a policy later. One of the person in this post asked to have term plan for her mother at 60 which you said not possible. Than keeping that in mind i feel to have the policy till 75 or more.

    One of the other person wrote that if 1 crore is less after 40 years then the premium so. This also convence me to go for more than 75 years.

    One of the other Gengle men said to have 2 policies rather one. so that no need to cancel if in case of less earnings.

    One of the other person said take it for 10 years and the rest should go to investment. That also looks good but having no cover is little worry to me.

    i have gone thru other term policies which are giving return of premium after the certain insured period. not sure how that works. but seems premium is high.

    i am alcoholic on regular basis but did not find that option in any of the policy premium calculator to see what is my premium. I do not smoke but what if i start after few years. should i convey to insurer and pay extra premium?

    Most of the insurance companies says almost for all deaths it is covered. This is kind of a confusion to me or to think twice in all the angles as one from this post said zebra crossing and all. i will only get to know that unless i go thru all the terms.

    after reading this entire article now i am kind of a guy who has info about but confused to take one.

    I also need pension and health insurance plan. Please suggest for all.

    1. Understand that you need term plan in the starting of your life, and not at the end. So think from that angle !

      Manish

  20. Jeetendra says:

    Very useful article Manish! It completely changed my perspective on term insurance tenure 🙂 Thank you.

    1. Glad to know that Jeetendra ..

  21. sankaravel says:

    aged 51 and going for a home loan of 1 crore, is it advisable for a term policy for 29 years

  22. Vipin says:

    Hi Manish

    I already have 2 term policies from ICICI and kotak of a total of 75 lacs.
    Now i have bought a house i would like to increase my policy value to 2 crore.
    Should i take a policy for 1.25 crore from a different company or can i take a topup from the existing ones
    Thanks
    Vipin

    1. You can top up the existing one’s itself

  23. Avishek says:

    My concern is as below :

    I am 25 yrs old. If I take 1 crore for 75 yrs suppose. I will pay max 50*8000=4 Lakhs.

    There is a 50% chance I ll die by 75.

    If I pay take insurance till 60 yrs. I will pay 35*8000= 2.8 Lakh.

    This 8000 will be very less value after 30 yrs too.

    So why not pay (4-2.8)=1.2 lakh more when there is a high change getting return for my family?
    Anyway that 8000/month is also constant, if 1 crore values 15 lakh after 40 yrs, 8000 will be mere 800 only.

    You are taking hypothesis that living more that 75 is high chance. but giving 1.2 lakh more still there is high probability that there will be some return for nominee than none.

    How you look into this?

    1. It all depends on how you see this. I dont think there is high chance that one will die before 75. Thats the reason the argument is there. If you feel that in your case, you will benefit, you can go ahead. But make sure you understand that companies have better data and research the customers.

  24. Shekhar says:

    Very informative. I am convinced about not buying term insurance beyond 60-65 years now.
    My situatuon: 26 years old unmarried guy with no dependents with a annual package of 9 lacs.
    My question: Should I still go ahead and buy the insurance or wait till I actually have some loans and dependent on me?

    Also, how is Reliance Term insurance?

    Will be purchasing my term insurance after your response 🙂

    1. You can go ahead with term plan. I suggest HDFC term plan. If you can fill up this link, we will help you with that properly .

      https://www.jagoinvestor.com/services/life-insurance

      Manish

  25. Yusuf says:

    I want to take term insurance fr my mom of 5cr .her age is 60 years is it possible .she is house wife

  26. Rohit says:

    Super explanation! Extremely clear and convincing!

    Can you help me with something. I use to smoke 1-2 cigarettes per day(have been smoking from past 3-4yrs). It spikes only if there is some party. But its been a week and i have decided to quit smoking. But, i also fear that may be in the future I might start again!

    So, what should i do? Should i take a policy declaring that I am smoker or can i avoid that?

    Thanks!

    1. You will have to declare that you are a SMOKER . No choice here !

  27. Vibhor says:

    Should we take term insurance from policy bazaar online or from my lic agent

    1. You can take it from anyone !

  28. Ashok says:

    Kindly advise if Term policy is discontinued without payment of the premium and the policy lapses, can the insured person claim refund of the earlier premiums paid ? Kindly let me know.

    1. NO, why should you be able to claim refund ?

  29. Rohit says:

    Hi Manish,

    I have taken a term plan this May SA= 1 Crore for 30 years. Now I have read some articles and came to know that it is always better to take 2 policies worth 50 lacs each from different insurers than taking one policy worth 1 crore from one company.
    Can you please put some light on this matter? Now that I have already taken policy for 1 year, can I reduce SA from the next year so that I could buy from another insurer?

    1. Anand says:

      Rohit,

      The strategy of having two policies of 5 0 lakhs each is not logical. If you have one policy where you have honestly submitted all the details, then in case of a claim, no company can deny the same. In case of a claim, the dependents have to do double the paperwork to claim the amount for two different companies.

      If you have taken 1 crore policy, let that continue. Note that you cannot reduce the sum assured in your existing policy. You will have to buy a fresh policy.

      Also note that older policies are better than new policies, because in case of early claim there will be more enquiry and more delay in payout of the claim amount.

      Rest assured. Do not close your existing policy and in future if you have more responsibilities (like new home, kids etc), then purchase fresh term insurance and of course continue your existing insurance as well.

      1. Rohit says:

        Thanks Anand, for your advice.

    2. Hi Rohit

      No Rohit, as of now just 1 policy in term plan is ok . 2 policies was a concept years back when term plans were new and 1 crore was a very large cover. Now a days its not !

    3. katkam says:

      I tell you there is still advantage of taking two policies of 50 lac each , then a single policy of 1 crore.
      it is not regarding claim settlement risk.

      consider in future you want to reduce the amount of the insurance cover you desire, for reasons like , your family no more dependant on you, you feel fit, or you cannot pay the high premium.

      In such case , you cancel one policy, and keep the other one for 50 lacs, which you feel is sufficient now. If you had a single policy , you cannot reduce the policy amount, so you dont have this flexibility.

  30. Krishna says:

    I have another take on it after looking at the Greece’s problems. Retirement age in Greece is now being hiked to nearly 67 years of age. It is quite high in developed countries even if we do not consider ongoing Greek proposals. In 40 years time, we do not know what could be the situation in India. Also, inflation numbers go down as the economy keeps growing into becoming a developed nation. Looking at our growth rates and 40 years duration, India’s situation could be a lot different than what it is currently. I see no harm in taking 75 years term plan looking at this. If the situation changes and we are required to work well past 60 years of age then we might as well need this insurance as cushion. Though the cover may not be sufficient then 40 years later. On the flip side, getting additional cover at that old age and still working, we will be hit with higher premiums. No conclusion/solution from my views but a different take.

    1. Hi Krishna

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  31. hello sir
    i am 20 year old teenager should i go for term plan or to take SIP for a long tenure ????

    1. Hi Prashant

      If someone is financially dependent on you, only then take a term plan . Else better start the SIP !

  32. Siddharth says:

    Person like me who is earning around 1.5 Lacs per month and has 4 dependants, whether they shall take term plan at least it will help dependant for next 10 years if some thing happen to me in my 30’s or early 40’s?

    1. Yes, I suggest you take it if you feel they would need money in your absence

  33. Vikas Chopra says:

    I am a 40 year professional. Me and my family is covered under my company’s health insurance policy till my age of retirement I.e. 58 years. I am confused that whether I should invest in health insurance plan now to take care of post retirement health needs? What is the right time to invest?? Pl reply. Thanks.

    1. I think health insurance is still a very important thing you should take. What will you do after your retirement or if your company stops it . At 40 you have a good chance of getting a policy at good pricing !

      I think the best think you can do is leave your details at https://www.coverfox.com/jagoinvestor . And you will get a expert assistance on selecting and buying the right policy for you.

      You can then take the decision.

      Manish

  34. chandeeswararao says:

    Hi Manish,

    I am at 34, i am planning to take 1 crore term insurance policy

    can you please list out the top 5 term policies

    is it good to take any kind of riders, if yes, what are the suggested riders

    i heard that there are monthly income plan along with term insurance, Is it good to take that?

    waiting for reply

    Thanks Much
    Chandeeswararao

  35. Rajesh Gannavarapu says:

    Hello Manish,

    Would it be possible to share your mail ID and it is acceptable to write to you?

    Rajesh

    1. Hi Rajesh Gannavarapu

      You can contact me using http://www.jagoinvestor.com/contact .

      If its regarding any professional advisory service, you can see http://www.jagoinvestor.com/services

      Manish

  36. Rajesh Gannavarapu says:

    Hello Manish,

    Thanks for this really logical and excellent article. It is very useful for all those who would like to become informed investors. Also, I fully agree that after 60 years, it is the retirement planning that is the most relevant, not really the life insurance.

    Rajesh

    1. Hi Rajesh Gannavarapu

      Thanks for your sharing your valuable comment on this topic. Please keep sharing your views in future also

      Manish

  37. Vikrant says:

    Take a Term Plan of 10 Years. Lets consider for example Lic E-Term.
    Lets say the Premium per year is Rs 8000 for 10 years. 10 * 8000 = Rs 80000
    Means I have paid total amount of Rs 80000/- only for my cover of Rs 1 Crore.
    And the actual value of this 1 crore at the end of this 10 years would be roughly 40 to 45 Lacs

    Now, consider if i take a term plan upto 70 Years, the premium would be Rs 30000/- per annum.

    Hence I pay Rs 30000 * 35 = 1050000 (considering my age is 35, i need to pay premiums for next 35 years) for my cover of Rs 1 Crore. While the actual Value of this 1 crore at the end of 35 years would be mere roughly 10-15 Lacs

    I think It would be smarter to take a 10 Year Term Plan with a premium of say Rs 10000 and Save balance Rs 20000/- on extra Heavy Premiums each year.
    This Same saved Premium Amount of Rs 20000/- can be invested each Year in Equities Systematically upto 70 Years. Would definetly yield much much more returns compared to my 1 crore term plan at the end of 70 Years.

  38. Manas says:

    Thanq Manish
    Its my good luck, In the last minute I have changed my decision
    I already have determined to buy a term plan for till I am 75 year.
    This discussion is really eye opener for common people who are nor conversant with market,money and economics.

    Thanq once again from the bottom of my heart.

  39. mayank says:

    thanx a lot first of all.

    MY CURRENT AGE IS 24 YEARS.

    i have read the article. my question is that difference in premium is only 516 rupees per year for coverage till 75 year & 60 year.(AEGON iterm plan-90 lakhs) then why to take chance ? if i dont want to continue after 60 years of age then just stop paying premium and thats all. but in case i wish to go for new cover on that age it will be highly costly.
    and another question is that why should WASTE money with insurance company by taking insurance till 60 years only ?as per general circumstances average age of indian is 75 currently. (instead take till 75 and pay around 150000 more to insurance company and take 1 crore is a better deal what i think) WHAT IS YOUR OPINION ?

    Thanks a lot again.

    1. Yes, if you are comfortable with it, go ahead !

  40. Satish says:

    SBI Life is offering term plan with increasing cover, i.e increase in Basic Sum Assured by 10% (at simple rate) at the end of every 5th Policy Year without any increase in Premium. Will that be good to beat inflation.
    .

    1. Yea its a good option, but the premiums are also high !

  41. Dhivya says:

    wow eye opener….

    yes ur absolutely right…
    i took 75 yrs under aegon religare 🙁 2 yrs passed by…
    but happy that i took a term insurance… will wait till next year until the policy end date n take up a new policy… ya 2 yrs got wasted but my money over the forthcoming years get saved 🙂
    thanks again for writing this article.

  42. RK says:

    Manish… Nice article… I have kind of made a mistake since I have recently taken the iterm policy from aegon till 75 years… What’s the remedy here?

    1. Nothing much .. Just do not do anything right now ..

  43. feroz says:

    my cousins in dubai working i need term plan in NRI which best plan ur idea?

  44. Hvishal says:

    Also for the same SA 50 lac, ICIC iCare option II has around 12k premium and HDFC click2protect has around 8,500 premium. HDFC also doesn’t have medical but premium is lower than ICICI.

    1. HDFC has medicals, just that below 50 lacs they dont do it !

  45. Hvishal says:

    Hi

    I want to buy term insurance of up to 1 CR as per the income formula but want to go with two different companies for 50 lac each. I’m planning to buy it from ICICI iCare and HDFC click2protect. Are these good plans, i believe both of these doesn’t require medical. Are there any other better plans. Please suggest.

    1. I dont think its a good idea now with so cheap premiums to go for 2 plans, only take one .. HDFC or Aviva or ICICI are all good options !

  46. Bharat says:

    Manish,

    HDFC & AVIVA – 50lakh each – no choosing any riders – till age 60.

    Is this ideal ? Please suggest.

  47. Nihar Shah says:

    Thanks Manish! Appreciate it… 🙂

  48. Nihar Shah says:

    Hi Manish,

    First of all Thank you so much for providing such a critical information on your website.

    I am currently working and my company has a Group Health Insurance Policy which covers me. I have my individual Tata AIG Mediclaim and New India Insurance Accident Policy worth 5 and 10 Lacs respectively.

    I have been married for more than 2 years now and due to circumstances my Wife still doesn’t have any Insurance cover. We both were working abroad and were Insured by our respective companies.

    Now that we have shifted to India, I still have my Mediclaim and Accident Policies running but I now need to take Health Insurance and Term Insurance for my Wife.

    I had spoken to one of my good friend regarding this and she had suggested to take Oriental Family Floater for me and my Wife. After researching on Web I was certain to buy Oriental Policy till I visited your website! Smile

    However I am confused in following area:

    After reading your couple of posts where you have mentioned Oriental Family Floater is ideal if you want to cover your parents below 60, otherwise you can suggest some other family floater policy (but you didn’t name the policy there) I really got confused. However in my case I don’t want my Parents to be included as they have their own policy.

    Q1. Will it still be the best option to buy Oriental Family Floater?
    Q2. If so, can I also add my children dynamically in the policy in future?

    Additionally I had decided to take up Term Insurance for my Wife too.

    For Term Insurance, I am confused between two products

    a. HDFC Click 2 Protect
    (Cover All types of Death but doesnt have accidental rider)

    b. ICICI iCare with Accidental benifit
    (Doesn’t cover the death due to Sports like Mountaineering, Para-sailing Skydiving etc. Death Due to War. Also when I spoke to ICICI Customer Care also said that they don’t cover any Breach of law like for e.g. if a person dies while crossing a road anywhere apart from Zebra Crossing! But where do we find Zebra crossing in India? This actually alarmed me and made me worried!

    Q3. Request you to please suggest which Term Plan should I go with?

    Appreciate your prompt response!
    Thanks,
    Nihar

    1. 1. Yes it is a good policy , go for it

      2. No , it wont be dynamic, you have to manually inform them about adding them ! .

      3. Aviva is a good option

      1. Nihar Shah says:

        Thanks Manish!

        I will do as said! Appreciate it.

        1. Nihar Shah says:

          Manish,

          Could you please tell me your personal preference between ICICI iCare and HDFC Click2Protect? Which one out of these two you would go for?

  49. Ganesh kumar says:

    Dear Mr. Manish,

    Thanks for your valuable inputs. I am 34 yrs old NRE, can i take online policy from here? Can you suggest some of them as well.

    Looking for your feedback.

    Regards,

    Ganesh Kumar

    1. Online policy from where ?

  50. Kundan says:

    The best thing which I understood is to go for a 75 years of tenure and leave the policy after earning years are over

  51. Mahesh says:

    I do not fully agree on this.

    Insurance is all about probabilities. Longer duration means higher probability and hence higher protection. Extra bit of money will help spouse to take care of him/herself even if all other responsibilities are fulfilled.

    If you never have to claim insurance in your life, then you are very lucky. You will be extra lucky if you don’t have to claim till 75. My vote is to take that extra mile and cover for longer period.

    Hope the best, prepare for the worst!!!

    1. Thanks for your views on this Mahesh !

  52. Sreelatha says:

    Finally, someone who writes sense! I agree that its better to take a TI later in life, if one wants to that is and not make these insurance companies richer!

  53. Reshma says:

    Hi Manish,

    Nice article. I see your point on why term plans should not be covered forever! The real purpose behind having the insurance itself gets overlooked. But you have not considered one aspect here. Recently the retirement age has got increased from 58 to 60 years. Considering that, there is a high possibility that the retirement age after 20 -30 years will be further increased. So I would suggest to have the term insurance plan at least until you are 65.

    Regards,
    Reshma

    1. Reshma

      Not sure on that. Retirement age of 60 is there because physically its not possible for an average person to work beyond that . I dont think retirement age wil go up in future like 70-75 yrs, rather I feel it will come down over long term .

  54. DEEPAK SHARMA says:

    Thanks manish ji,
    good to read your blogs,
    but i have a questions , my family (6 member)totally depends on me in this case i am thinking that i should purchase the term plan of rs 1 crore up to 75 yrs . please suggest which company’s term plan is better for me . or some other way regarding subject. realy confused please help.thanks

    deepak sharma
    09717896523

    1. You can look at Aviva or HDFC

  55. Himanshu Pant says:

    quite an interesting take on this million $$$ or rather Rs question but I think has a couple of generalizations which can be risky

    a) Although life expectancy is increasing but so are cases of untimely deaths due to lifestyle diseases ( High BP , cardiac problems) and other incurable diseases ( like cancer )

    b) With reference to pt 1 , I think we do need it beyond our working life to at least support those are going to be life long dependant on us like spouse.

    c) Having enough wealth by the time I retire looks highly improbable considering the current market uncertainties ;).. And we have to note that unlike our previous generation , most of us are in private organizations which go by the rule of hire and fire so we can not make any projections based on our current salary for future financial state. At best we can be optimistic.

    1. Himanshu

      a) Yes, thats the reason we take the insurance , right

      b) She is dependent on your money , not you personally . I am not sure if you are still clear about financial dependence point . If you are not bring any money home , then if you are there or not there, how does it matter ?

      c) Then its a perception issue . If you really feel that by retirement you cant arrange for wealth , then you should better take it till 75 yrs !

  56. Sadanand Nayak says:

    It is totally an individual decision whether to be insured or not after 60 years. Just an another thought came to my mind.

    If someone has absolutely made up his mind of getting insured till 75 years of age, then it make sense for him/her to buy insurance till 75 years of age right now, instead of now buying till 60 and then buying an another insurance at 60 for another 15 years term.

    Considering the current premium quote for 75 lakhs Sum Assured for a 30 year male non- smoker (quote as per Aegon Religare website), you are going to loose around Rs. 32,000/-. Kindly note Rs.32,000/- is the discounted net present value (Discount rate considered is 9%). The actual saving will be higher than this amount.

    1. Yes, agree with that !

  57. shibu sam says:

    Exactly what I have in mind is written here, if you invest 4500 a month in RD for 10 years, you will get approx 9 lacs, guaranteed…

    Same if you invest 4500 in life insurance, the maturity amount will be approx 500000 + loyalty additions which may be 2 to 2.5 lacs….

    you are investing the money thinking you will live longer and get this money after 10 years… so better go for RD rather than life insurnace

    Insurance is not an investment… just think this tag line before taking insurance…

    1. Yes , exactly my thoughts

  58. Rajesh says:

    Hi Manish

    Thanks for the Great articles! It makes much sense that a Term insurance is needed only till your retirement.

    I have a question on the Term insurance that i’m planning to take one..

    Will the new IRDA guidelines for life products affect the premium rates for Term insurance? Do i need to wait till Oct 13 or should i go head and buy one? Thanks for your expert opinions!

    1. angan chandra says:

      you can wait till Oct’13 provided your birth date shouldn’t fall within Oct’13, if fall it will increase the premium amount. As you know in term plan the early age you enter will pay less premium & for later age premium will increase.

    2. Yes it can change, you can never be sure on this but !

  59. Hitesh Siroya says:

    Very nice Article, i have already done my term plan and it will end at 62 years of my aga. it seems i have taken right decision.

    Thanks Manish by glancing on this.

    1. YEs . .good decision !

  60. angan chandra says:

    very nice article, something different. It highlited the hidden fact of Term plan & it’s true that there is no need to continue term plan beyond your retirement age. So if you buy plan at 30-35 years age of cover 1 cr. for 75 years, if your death happens around 70 year of age. That 1 cr. of no value of then, considering the premium paid during this 30-35 years.

    very nice post—

    1. Thanks for appreciation 🙂

  61. Gayathri Iyer says:

    Nice Article.. But some how, like the most of the above comments, I do feel that insurance should be taken for maximum eligible period now as –
    a) it cost only a few extra bucks now – literally few hundred more annually;
    b) future is uncertain – the fact that ‘you should have built your retirement corpus by 60’ may not always become true – for various reasons and honestly, many people do opt for alternate ways of earning even beyond age of 60 – by means of consultancy, business, coaching, part-times, etc. to get that monthly income, so any unfortunate event though beyond 60 may impact the financial status and
    c) you always can stop paying the premiums @ retirement – if you have got the corpus by that time – but you will definitely not be eligible to take fresh term insurance at that time – so better take now.

    1. At the end its upto you .. If you feel its worth going for extra tenure, please go ahead !

  62. siddhant says:

    Do not agree with this article, If you are assuming average age is increasing effectivelly the productive age will also increase, How did you forget that?

    also about the long tenure, I would suggest a longer tenure because you can always stop the policy at any point of time but can not take a new one later,

    Sorry but do not agree with this advise at all, I would go for the highest possible tenure & once I reach the stage where my corpus is good enough I will just stop paying, that is more sane option than taking policy for shorter term…..

    1. Ram says:

      Siddhant, even today people don’t get jobs after they are 60 years old. The reason? Because there is a LARGE pool of young people already waiting for jobs. This pool will only get LARGER by the time you and I are 60. You think we’ll be offered jobs at 60 when today itself people are not getting jobs?

      So think again, will productive age really increase? Yes, maybe the person’s ability to produce will remain but what use is ability if there is no job (i.e. platform to produce)?

  63. sevan says:

    Why bother how much the Company makes profit out of this? The companies are definitely there to make profits and no one has claimed that they are doing this for charity. Its their work to roll out different products and our choice whether to opt it or not. Even pure “Health” Insurances are “for-profit” Business to the respective Companies. So one must not buy that too?

    1. You wont believe , many people do not understand this point .. They look at it from charity !

  64. shaggy says:

    manish… sorry to say that this is an half baked article and not true or applicable with many people from different financial class…… hope JI is NOT short of productive topics…… and as i know this is not manish… kindly post an other article with uses of term plan and how to manage it cleverly to safe guard various situation at different episodes of life….

    a well-wisher

    shaggy

    1. Shaggy

      Thanks for your views . I had put my views on the topic and concluded that one should not just shift from one insurer to another just for this reason that the other one is giving it for 75 yrs . Why do you feel its half baked ? Which point do you feel is not correct ?

      1. shaggy says:

        hi manish…. i just recorded my views here….

        “Should I take the cover for the maximum period?”
        >YES, just take it…. after all you can stop paying peanuts at your ease/based on your achievement/need …..

        “Does it really make sense? or not?”
        > this question is hypothetical…. answer lies with in your strategy….

        JI- You don’t need it beyond your working life
        > very strange though…. who dose not need an extra protection… what is the sufficient money at any point of life for your beloveds?

        JI- For a person who is not earning and does not bring money home, his death will cause family only emotional loss; not financial loss.
        > first of all how u get an high covered term insurance if you are not earnign? and what an adamant logic is that emotional loss should not replace by financial gain…. think how morally help full for family members?

        JI- Hence, logically you need to cover yourself through a life insurance product, only for the time you are working and others are financially dependent on you.
        > you are working are not the dependents are DEPENDENTS

        2. You will have “probably” have enough wealth by the time you retire anyway
        > YOU/JI or who gives me the guarantee THIS

        JI- that you would have completed all your financial goals by that time.
        > onlu if your alive

        JI- The premium factors in your tenure already. They have hired people who are 10 times smarter, who design products (they are called Actuaries) that generate large profits for companies and not investors.
        > why your are getting in to their PLATE of food????
        > have any insurance company ever said we are in to “Insurance Charity” they all ways said we are in to “insurance business”

        JI- Life Insurance is a “for-profit” business. They design things, so that they earn profit.
        > this is TRUE for ALL insurance Products NOT ONLY FOR TERM INSURANCE

        JI-You pay premiums to get that term plan, it does not come free!
        > there is no free lunch in the world
        > pay pee nuts and make term plan to fit well as a strategic support

        JI- You will live longer – and they already know that.
        > good to know and every body love too
        > you guarantee that? then why any one should not cover them self by spending so called peanuts

        JI- Now just imagine this … Compared to the 1.25 billion people in our country, are you in top 25% or lower?
        > macro economics rarely help peoples damages that shake their world at basic micro level

        JI- The value of your sum assured is peanuts later
        > this is MOST irresponsible statement……
        > no sum is valued to peanuts other than if its clearly equal to cost of peanuts….
        > people who all calling 8000 premium a peanut or who may think 75lacks or 150 lacks a peanut after 40-60 years…. NEED to Understand ONE LOGIC….
        “the value of the money is NOT determined based on how much you have it”
        Example- bill gates will never get a Kg of GOLD for just 1 Dollar & he will never pay 1 million dollars for a packet of salted chips…..

        JI- Your family will get that 1 crore, which at this moment sounds good, but will not be worth a lot that time.
        > then take it for 100 crores!!!!!!!!!!

        Let me show you the mirror that lets you look into the future 🙂

        Let’s say you are a 30 year old guy, and your monthly expenses are 40k per month. You say to yourself, “Let me take that term plan worth 1 crore so that in case, I die my family can get 1 crore which will provide them some good monthly income.”

        JI-The money you get in term plan is a constant number, not linked to inflation!
        > oh now some body want a samsung galaxy for 2 rupees
        > keep shuffling your needs with hedged Insurance Limits ( as do with your investmentsssssss……….. stockssssssssss……….. earningsssssssssssss….. etc etc)

        If you NEED INSURANCE just Buy TERM plans
        IF you NEED INVESTMENT products then the whole financial world is open for you….
        try to play smart with mixing both… you end up reading an other blog which talks about Financial BLUNDERS……. ( hey you, unit liked policy guys…. happy going hhhmmmmm 😉

        term plans are huge risk on insurance companies and thanks for competence environment in INDIA…… last but not least this is one night mare for INSURANCE AGENTS- sabse bada kiladies…….

        Thanks manish for allowing me to share my madness….
        hope it will add some fun in the space

        Shaggy

        1. shaggy says:

          this should not be taken under the light of too much depending on Insurance…. people live with hope and work hard to reach their goals and majority will win the race…. but when it comes to INSURANCE then its a matter of unexpected and against NO GUARANTEE….

          Thanks Manish

          Shaggy

        2. Ram says:

          Shaggy,

          I’m sorry but I read your entire post hoping to see some hint of logic. It seemed like a lot of ranting to me. I wonder what you’re so upset about. It’s just an article.

          Regards,
          Ram.

          1. Shaggy says:

            Hi Ram…

            oh I don’t believe you read it full……. thanks hahahha
            its not ranting…. just a reply….
            you sounded like
            “oh why we should be upset its just a single murder”
            “oh whats big just one house is robbed”

            I have a rebel mind about something which not look right to me on media…. because i respect media a lot…. i cant JUST keep quite…

            please tally the number of comments for the article in favor of term insurance with the number of comments to the one against term insurance…. so get an idea of right and wrong…

            majority of people who developed rejection felling are not bothered about mentioning it….. Mahatma Gandhi friends….. but my friend name is chandra shekar azad ….. hahhahah

            you call it ranting…. no logic… not to be upset(like help less)…. and so on….

            i just name it FIGHT….

            Reagrds,
            shaggy

  65. Rajeshwar Reddy says:

    Hi Manishji,

    My observations….
    1. If 1 crore is peanuts at age of 70 then correspondingly the last premiums paid also should be considered with the same calculations. As per the inflation the premiums we are paying at that time are much more peanuts.
    2. Death is certain but the timing is uncertain. Nobody can predict it.So insuring oneself at an early age might be the right choice when having financial responsibilities.Am i right?
    3. I partly agree that term insurance is not necessary after the working age? Because most of the people are retiring from their jobs and still working at later stages now a days.So no harm in paying the little money at that time…if you are starting the plan in an early age.
    Please clarify.

    1. Yes, all your points are correct . At the end if you have to take decision based on your understanding of the subject .

  66. Parag Rodrigues says:

    Good Article Manish.

    Paying premium for another 15 yr (till 75 yrs)s would be a peanut at that time too. Although, the value would get convert to lacs with inflation rate, it would be still an additional financial flow for family.

    Have Good day ahead.

    1. Yes, Now its on you if you feel its a good rational to go for 75 yrs or not . I personally dont think so .. but you might feel like that. nothing wrong in it 🙂

  67. Chetan Ambi says:

    Nice one Manish.. As mentioned in the forum you came up with this article.. Thanks for clearing my doubt in the forum and now all jagoinvestor readers’ doubts.

    1. Thanks for asking it , It gives me ideas !

  68. Rachana Oza says:

    Very good article, It is really important that you should have plan for retirement at younger age, and not for term insurance after 60 years,as income is the essential element to be consider at the time of retirement and not insurance.

  69. Sriniv says:

    The point is a valid one.

    On this issue, a few more points can be thought of, which can impact the decision.

    There is a difference in premium for various terms fo sae sum assured and as term increases, premium increases. Thus, it is advisable to take the insurance for the term required. But, if you check, the difference in the premia for 5 years is not more than Rs 1000-1500(I checked Aegon religare for 10000000 for 15 years and 20 year period). In such case, if one is in doubt, one can take a policy for slightly higher term. This will give one flexibility, if one wants to increase the term at the last moment. One has the flexibility to discontinue anytime, one wishes.

  70. harshit says:

    gr8 article manish….really heads off….what a critical thinking and we all r getting into the traps.

    I have a query is one time premium plan is best or annual premium plan is best in case of term insurance.

    1. Annual premium is better for most of the people

  71. Ram says:

    Great article Manish! Even before coming to the end of the article, I was thinking I have already taken a term plan for probably till I’m 75…what do I do? Maybe I’ll just stop paying after I turn 60…and viola, you have given the same suggestion…guess reading Jagoinvestor articles has made me wiser!

  72. Arvind says:

    Nothing great about suggestion… If affordability of premium post retirement is the case, then one can break any year even after 60 years… If 1 Crore is going to be peanuts at 70 years, then premium committed till maximum age will be broken peanuts as well 🙂 60 or 75 or 100 doesn’t make much difference… If the premium varies drastically between 60 0r 75 or 100, then it makes sense to go for 60 years or further low period etc.,

    1. Thanks for your views Arvind

  73. KRANTI says:

    My Personal Opinion after reading this article: (1.) “75 yrs or 60yrs……take it for longest duration 75yrs….and if you want to discontinue @ the age of 60 then do not pay premiums….else keep paying premiums till 75”. (2.) As 1 crore is peanuts at the age of 70 from now….so the premium for that will be peanut-shell so you can afford to pay na ??? (3.) Lastly 75 ya phir 60 ?? arey bhai jald-sey-jald TERM PLAN LEY aur aggey bhaad life mein !!

    1. Thanks for your views Kranti

  74. Biswa Singh says:

    Hi Manish,

    Thanks for this info. Actually wherever i myself thinking aobut something i get post from you explainning it. Its just a meer coincedence. When i took Bharati Axa which covers me till 60 i got to know about term insurance which covers for 75 years. Infact in many TVs programs the personal finance experts suggest go for term insurance which covers for longer time. But i also thought to my self
    1. I would have accumulated enough money to survive post my retirement given that i have taken a huge health insurance to cover for my family now itself.
    2. My children will not be dependent on me. If i will be no more after my retirement then whatever i have by that time will be enough for my wife.
    3. It may not be relevant but if i will not have term insurance after 60 then i will not be lazy now and focus on my investments and wealth creation more seriously and i am confident that i will acquire much more wealth by retirement which will obviously nullify any requirement of having a term insurance.

    1. Yes Biswa

      Thats the right way of thinking !

  75. Anant says:

    really informative manish.

    however i have a question regarding why there is difference in premiums for same amount of policies with different companies.
    for eg. 1Cr insurance- ICICI charges around 15k but SBI around 7k??

    for your info, i checked the same in few insurance comparing websites.

    kindly help.

    1. Its because they have different pricing methods .. like in any businesses

  76. sharad gupta says:

    Thanks Manish for this nice and usefull article. If people use insurance for earning or misusing then its impact comes on premium.

  77. NAGAMOHAN says:

    Very Nice Article,I would be happy if you had made a comparison on the Insurance Premium upto the age of 60 and upto the age of 75 and Indicate the additional cost spent without any big benefits.

    1. ashal jauhari says:

      Dear Nagamohan, you can help us to know it.

      thanks

      Ashal

      1. NAGAMOHAN says:

        Dear Ashal Jauhari,
        I made a comparison with Aegon Religare “i-Term Plan” for two options
        Option-I
        Age of sum Assured-30Years
        Covered upto age -75 Years
        Tenure of Insurance-45 Years
        Category – Non Smoker
        Additional Riders – No riders considered

        Option-II
        Age of sum Assured-30Years
        Covered upto age -60 Years
        Tenure of Insurance-30 Years
        Category – Non Smoker
        Additional Riders – No riders considered

        The premium for Option-I and II are Rs.8400/ and Rs.7300/ per annum respectively.If we consider coverage upto age of 60 is enough ,under option-I we have to pay Rs.2,52,000(Rs.8400*30) and under Option-II we have to pay Rs.2,19,000(Rs.7300*30) which gives a total saving of Rs.33,000/.

        If u have Invested the remaining Rs.1100 in a Fixed deposit Every year (First year Rs.1100 for 30 years,2 nd Year Rs.1100 for 29 years and so on)at the Interest rate of 10%(assumed) you could get a Total maturity of Rs.199037/.Which comes almost around 90% of the Total premium paid under Option-II(Rs.199037/219000).This option holds good only if you feel that Insurance only needed upto the earning period.

        1. ashaljauhari says:

          Dear Nagamohan, thanks for the research. So what’s your learning from the research? the Manish is right or wrong in his approach to ask for insurance only upto earning years?

          Thanks

          Ashal

  78. suresan raja says:

    Sir, It’s an eye opener. I also agree that after the retirement , one’s regular income will be stopped. So there will be a question to how to pay the premium after the retirement.
    For last 3/4 days I was planning to take a term plan from Ageon. I am 52 years old and there is no any insurance with me. I check with their website or online policy. They are not allowing me to take the policy less than 30 lacs even I am not a smoker. For 30 lacs, for the term 15 years, its cost me Rs.17000/- p.a. I am having wife and 2 kids.

    Could you please suggest me a term plan of which company,sum,period to take.
    Regards,
    Suresan Raja

    1. KRANTI says:

      Check out with (1.) SBI (2.) HDFC Click2Protect (3.) Aviva

      1. suresan raja says:

        Thanks Kranti for your suggestions.

        Regards,
        Suresan Raja

    2. Did you check with Aviva also ?

  79. Hema Aravind says:

    Very nice article, Manish. I totally agree that term plan tenure should be just as long as one’s retirement age and it’s not required beyond that. I especially liked the second point – the sole purpose of taking term insurance is to protect one’s unrealized financial goals in the event of his premature demise. Assuming that he will achieve all his financial goals by retirement age, a term plan beyond that age becomes unnecessary.

    1. Yea .. thanks for your acknowledgement

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