a plain vanilla term plan A major component of every person’s financial plan. However, insurance needs vary according to one’s age and liabilities. For example, a middle-aged working woman with high income, large assets and very few liabilities may not need Insurance Absolutely. On the other hand, for a young professional with an education loan, it is advisable that a term cover equal to the loan amount should be purchased. Mint Tells you how much insurance you need at different stages of life and what it will cost.
Age: 24-29 Years: Young professionals usually do not need insurance. However, if you have an education loan or are supporting a parent or sibling, get a term plan that covers your loan or sibling education expenses, as applicable .
Age: 30-35 Years: By this age one is most likely to be married and have children. Insurance must be purchased to support dependent children, parents and spouse. You may also be paying off an education or car loan. At least a cover amount ₹1 crore or 8-10 times of your annual income should be purchased. ₹1 crore term cover ₹1,100 every month.
Age: 36-45 Years: At this stage, liabilities multiply as you start planning for kids’ college and take on high-ticket loans. The early 40s to 50s also mark peak earning years with high lifestyle costs. Insurance has to be purchased to protect dependents’ income, support financial goals, and cover debts. Buy a plan equal to 12-15 times the annual expenditure of your dependents.
Age: 46-55 Years: One can take an education loan for the education of children. If you already have a term plan, you can top it up with an additional cover of ₹50-60 lakhs.
Age: 56-62 Years: As you approach retirement, the outstanding debt and liabilities of the supporting children begin to decrease. Buy a new plan if you have outstanding debt. Retirees with no liabilities do not need insurance.
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