Reasons to Invest in a Term Insurance Policy Before Turning 40


, Business, Finance

By the time you reach your forties, you already have a lot of responsibilities on your shoulders. There might be your child’s educational needs to worry about and your retired parents to look after. Naturally, your forties are also the time when you start thinking about the future. You worry about making their lives financially secure for those who are dependent on you. And, getting a term plan can help you do that effectively.

But, why get a term insurance policy at such an age? Why not wait till your fifties? Well, here are the answers to your questions!

1. Larger Insurance Cover At Low Premium

Buying a term policy plan early on helps you to secure the financial future of your family at an affordable price. As your age increases, so does your insurance premium amount. Thus, the earning members of a family need to purchase term policy as soon as they can. The plan will help in providing your family the financial protection that they deserve in case of an unfortunate event.

As such, an earning individual needs to buy a term policy with a life coverage of at least twenty times the annual income, up to the age of forty. A person in his forties needs a ten to twenty times cover. And someone in his fifties should go for a life cover of five to ten times of the annual income.

2. Offers The Much-Needed Financial Security

If you are the sole bread earner in the family, buying a term policy is more important than ever for you. You might have taken major loans like car loans, housing loans, or you might have some other obligation. In case there is an unfortunate event, the term policy will help in covering the risk of loan repayment.

3. Starting Early Further Reduces The Premiums

In most cases, people are still healthy before reaching their forties. Generally, common diseases like thyroid, blood pressure, diabetes, and so on do not impact people that early. So, being at the peak of your health will help you get lower premiums compared to someone who is well past their forties. There is no point in delaying to take the policy, and then, ending up paying a higher premium amount.

Moreover, the insurance premium amount does not change during the tenure of the policy. However, the tax component might change as per the prevailing regulations and tax laws laid down by the government.

4. The Major Tax Benefits That Can Be Availed

Saving up income tax is a major concern for many people. And the premium that is paid towards a term policy can be a major part of the tax-saving investments. While buying a term policy, you get to avail tax benefits that might be applicable under Section 10(10D) and Section 80C.

So, buying term policy before your forties is a good idea because you get to save up on income tax when you’re at the peak of your earning potential.

5. Term Policy Offered By Employers Isn’t Enough

You might be at the zenith of your career at this point, which makes it the right time to start thinking of branching out. You might want to start something on your own or look for better opportunities. Now, the term policy policies offered by the employers are usually not portable. Their validity ends as soon as you leave your job.

Hence, relying on your employer for term policy is not really a sound plan. You need to look for your own insurance plan that is affordable for you and has the right risk cover for your family in the long run.

6. A Better Option For The New Entrepreneurs

In continuance with the earlier aspect mentioned here, you’ll benefit in more ways if you go for a term policy, while starting a new business or career. You will be saving on costs by going for term policy rather than a cash value policy. Thus, you can use your balance capital or income for developing your business or career.


Life keeps throwing surprises at you, and sometimes those surprises are not the most pleasant ones. So, why not stay prepared for the future as much as possible, and as soon as you can?