No amount of discussion is enough for you to know how important life insurance is for you and your family. But that means you will have to ensure that the life insurance policy you select has to provide adequate coverage to your loved ones in case of an unforeseen eventuality. And therefore, it is advisable to go with a comprehensive term insurance policy that offers life insurance coverage for many years while also allowing you to create savings and investments that can keep you comfortable even after the policy period ends.
 

It is also important to keep your life insurance policy in effect by paying your renewal premium on time. That way, irrespective of the term of the policy, you can enjoy life insurance coverage and other plan benefits without any worries!
 

What is the Ideal Life Insurance Coverage Period?
 

Depending on the type of life insurance policy you have, the coverage tenure will be appropriate for securing your needs. For example, a pure term insurance plan that does not offer any maturity benefits or bonuses² should have a good life insurance cover that offers protection for the maximum number of years, as high as 100 years.
 

Here, the term insurance should offer the highest possible coverage tenure so that your loved ones are protected for your whole life. Conversely, by choosing a term plan that has a very short policy period, you risk leaving your family without any life insurance coverage for the remainder of their lives. Moreover, it is essential to note that term insurance premiums are quite affordable and so a long-term insurance policy period does not affect your finances gravely.
 

However, in the case of other comprehensive insurance policies such as a savings plan or a Unit-Linked Insurance Policy, you can opt for life insurance with a maximum maturity age of 75 years. This is because such a policy offers the benefit of building your wealth while offering life insurance cover to you and your family. Unlike term insurance, the premium of a comprehensive policy provides a dual benefit, which means that the premiums will be divided between the life cover and the investment. Since the investments have a maturity period as well, it is sufficient for you to have life cover protection as long as the investment lasts.
 

There are a couple of reasons why a comprehensive policy should cover you up to 75 years of age. Firstly, the income you receive during the years of your active professional life is good enough to manage the premium payments of a comprehensive policy. Post-retirement, it can get difficult to manage premium payments for an investment insurance plan.
 

Secondly, the risk of an unfortunate incident affecting your family increases with age. If you have loans, debts and other expenses to take care of, then the premiums payments, which increase as you age, could cause a strain on your financial resources and should anything happen to you, your family will be left fulfilling the debts instead of leading a comfortable life with the investment corpus you have created for them.
 

Why Should You Select an Appropriate Life Insurance Policy Period?
 

Your life insurance policy period will depend on the age at which you purchase your life insurance plan. Therefore, when you buy the plan at a younger age, you can enjoy the entire policy period.
 

But apart from that, here are a few other reasons why a suitable life insurance policy term is important:
 

• More savings: When you buy your insurance policy online, you can choose insurance with maximum coverage suited to your needs. However, you can benefit from saving more with a flexible choice of premium payments. Tata AIA life insurance plans offer you an easy choice between a single premium or limited premium pay, both of which ease your burden of paying premiums throughout the policy term.

   

• Better choice of plans: Most life insurance plans offer coverage up to 75 years of age, keeping in mind the convenience of premium payments. For instance, you can have more options in ULIPs where the selection of investment funds plays an important role in building your wealth. Therefore, you can generate a financial corpus while also enjoying life cover protection under the same plan.

   

• Creates a balance: A comprehensive life insurance policy offers more than a pure risk cover. When you have a wide range of plans to choose from, it is easier to work on a financial plan that ensures wealth generation, life insurance protection and the fulfilment of your loved ones’ goals. It also becomes easier to decide the coverage amount needed to ensure adequate protection for all.

   

If you opt for a savings insurance plan, it is important that your policy coverage should at least cover the investment tenure. This is because market-linked investments are risky, and in case of any contingencies, it is important to ensure that your family is financially secure.

 

Conclusion



As you can see, there is no fixed or ideal number of years for which you should receive life insurance coverage. This is something you can decide by considering your family’s needs, your investment goals and how many people are dependent on you for their financial needs.
 

L&C/Advt/2023/Feb/0559