What Is the Best Time to Buy Term Insurance?

Most Indians purchase term policies in a rush during the last three months of a financial year. In March, insurers' agents and online portals face the most traffic as people want to avail of associated tax benefits.

It is wise to avoid these last three months as a hurried buying decision will attract greater chances of committing mistakes. People must give adequate time to market research and stick to plans that offer effective riders. 

Also, the agents remain busy handling more consumers between January and March. Consequently, they cannot dedicate enough time to explain the particulars of a plan to a potential consumer. Therefore, April is the best time to buy a term plan when almost all the insurance companies have left behind more than half of their annual workload.

Senior Citizens and People About to Retire

Married Couples Planning for Children

Working Professionals in Their Early 20s

These are several common reasons that necessitate owning a term plan:

• Family members become the beneficiary of death benefits if the policyholder meets an unfortunate demise within the policy term. This guaranteed money secures the future of your loved ones and ensures all liabilities are paid off.

• Some term plans offer maturity benefits to the policy buyers provided they have paid timely premiums.

• Add-on facilities provide extra protection to the policyholder's family when coupled with term plans. For example, if you add riders like an accidental, critical illness, or disability cover, the insurer will pay the dependents as per the laid-out conditions.

If you have chosen accidental benefits apart from basic life coverage, your family gets the insured sum in case of your unfortunate demise in an accident.

• Section 80C of the Income Tax Act (1961) permits tax exemption on income up to ₹ 1.5 Lakhs if it is utilised as a premium payment for a term plan. Moreover, the total sum assured to the beneficiaries in death benefits is entirely tax-free as per section 10(D) of the Income Tax Act.

• Some insurance companies offer rider options where the validity of the term plan stays intact even if you miss some premium payments owing to loss of work.

So, these are some of the well-established arguments favour buying a term life insurance plan in India.

Are you still wondering when the best time to buy life insurance is? Financial experts advise buying one term plan at a young age as soon as one starts earning. Two primary reasons behind this are you need to pay remarkably low premiums to ensure substantial life coverage. Moreover, it generates a sense of financial discipline from the early stages of your investment journey.