I am 30,male. Trying to understand the concept and rational behind premium calculation.
Lets say God visits me today and assures that no matter what I cannot die in next five years. Doesnt mean I will die in the sixth year!
In such a case should one still take the term policy today or after four years. [4=5-1; 4 rather than 5 so that if the policy is 1 year old, claim is less suspicious ]
I am trying to understand which one will be more cost effective in terms of the total premium payout during the entire policy period,as the annual premium cost rises if taken at an older age.
No. I am not trying to predict my death as that would defeat the very purpose term policies are for.
Just trying to understand a few things. As at a lot of places on net I have seen that queries raised by 50+ year olds who havent taken a term policy and wanting to take one often answered as – it should have been taken when you were young (30). At this age premium is too much. But to a layman like me,if he is still alive,he has saved premium for twenty years and so I dont see a negative in taking a term policy at 50.
I think to get a mathematical answer (to which one is better) one will have to find the premium he would have paid till date and its rupee value in todays date and compare it with the premium he will have to shell out if he takes a policy now and all the future premiums for the policy period. And these future premiums will then have tobe computed at todays rupee value. Not sure if I am thinking on right lines.
Ofcourse I dont know if insurance companies do give term policies to people in 50-70 year bracket.