Term insurance plan - Seeking Guidance

[judee]

Hi, so I’m a 27 y/o, single and planning to marry in the next 4-5 years. Earning about 1L/ month from my business.
I’m planning to get a term insurance of 1 CR till I’m 85 y/o. For that I’m required to pay around 6.8L in 10 years.

I was having a word regarding that and my mother suggested to extend the tenure (instead of paying in 10 years, pay in 20-30 years)

And I also came across someone’s post that they got term plan till they are 65 y/o since the main function of term plan is to support family in a case of accidental death while you’re the earning member. So if you retire by 60 and have accumulated enough wealth, then there’s no point of having a term plan till you’re 80/ 85.

Pretty confused about this whole thing so would like some more views and learn from y’all.

Thank you!

 

[martina2510]

@judee Yes in my opinion, term insurance till one is 85 is way too long. Regardless of whether one will actually live that long, the reasoning behind getting a term insurance is to protect dependents (family, parents) against untimely death of someone who is earning.

Typically, people retire at around 60. Hopefully, you will have put away sufficient amount to last you in your old age and won't need the protection of insurance. Any children by that time would also be working or getting there thus not necessarily be dependent on you.

Still if you want, you can have a longer tenure so that you can ensure that you leave something behind regardless or just for the sense of security. Mental peace is important as well.

extend the tenure and pay the amount slowly

Is you mother under the impression that your yearly premium would be lesser if you increased the tenure? If so, she is mistaken.

Whatever your premium is, it will be decided as per your age and current medical condition. Once set, it is fixed; it won't matter if you're paying till you're 65 or 80.

 

[judee]

@martina2510 I pretty much align with what you’re saying.

My mother suggested to keep paying premiums for 20-30 years for the ease of it.

 

[martina2510]

@judee Okay.. they might suggest you to get riders on your policy. It's fine to opt for critical illness and disability one.

But they could also suggest you getting one where you get your premiums back on maturity, you can definitely avoid that one.

 

[judee]

@martina2510 Alright boss! Thank you

 

[bigpaul]

@judee I will also suggest you to pay for the period of the insurance.

If you want to do the term insurance till 60, pay till 60.
If something happened earlier, you would have paid lesser.