08 November 2016
All-your-money-queries-answered
What should be the ideal term of a life policy?
What should be the ideal term of a life policy?
Sabira Merchant, Mumbai
The answer depends on a number of factors: your age, age of dependants, source of earning, number of years to retirement, etc. The term of the policy has to be determined on a case-to-case basis. Ideally, it should be equal to the number of years your family is likely to remain financially dependent on you. Practically, however, see how long you can support a policy in terms of payment of premium and strike a balance between the premium payment term and the period of risk cover. There are products available today that allow you to select a shorter premium payment term with an extended risk cover.