Getting all the aspects right of an insurance policy is critical, as your loved ones depend on it during an emergency. And when you choose to opt for a term plan that only provides the insured with a life cover, getting everything correct becomes essential. So, before you purchase a term insurance plan, let’s understand how to choose the accurate tenure for your policy.

Choosing the Right Policy Term

The policy tenure of a term plan ranges from 10-30 years that you can pick according to your needs and requirements. Let’s compare between short and long policy tenure based on situations.

Short Policy Tenure: A short-term plan is lucrative for many policyholders who have specific obligations to fulfill and want to protect their loved ones for a specified period. Here are some conditions during which you should get a short policy term.

• The retirement date is close, or you have already retired: In such a situation, a term insurance plan with a small tenure will protect your spouse and provide financial assistance if something happened to you after retirement
• The mortgage loan is close to getting over: If you were to pass away during this period, your spouse would be able to pay off the loan and have financial backup due to the death benefit
• Your health is worsening: If your health is declining and you have dependent children or spouse, insurance with short tenure will be the perfect option, but the premiums could be hefty if you have any pre-existing conditions
• You have dependent children as you are nearing retirement: A short policy term would allow you to secure your dependent children from unknown threats giving you a sense of relief and safety

Long Policy Term: Most policyholders opt for an extended policy tenure if their goal is to safeguard their family members from an unfortunate incidence that can occur at any time. Here are some situations during which you should opt for a longer policy term.

• Young earning individual: If you have just begun earning and have bought a term plan due to the affordable rates, you should go for a long term policy. As the years go by, you might end up taking an education loan to study or get married. For the increased responsibilities in the future, a policy term with an extended tenure is beneficial.
• Debts: In case you have taken a housing loan or a mortgage loan on your name, you can buy a term policy to provide your family with a financial backup if something happened to you
• Dependent family members: You could have dependent parents, spouse, or children that do not earn or have enough savings to look after themselves. In such a situation, a long policy term can protect your loves ones from any uncertainty.

You can customize your term plan according to your requirements, including the policy tenure. If you still have doubts about your policy term, you can take the help of a term insurance calculator, which recommends a tenure based on your age. You are also able to decide other elements of your insurance plan and get the best policy available.

Edward Bertrand