Term Insurance At 25: How Locking Low Premiums Works In Your Favour

In India’s dynamic financial landscape, term insurance may be your most vital shield. Many delay it, not realizing that waiting from age 25 to 35 can hike your premiums by nearly 50 per cent. Since rates are locked in based on your age and health today, starting early isn't just a safety measure, it’s a smart financial move to beat the inevitable rise in premium cost.

For instance, a Rs 1 crore term cover for 40 years costs around Rs 500-Rs 700 monthly for a healthy 25-year-old non-smoker. By age 35, the same cover can rise to Rs 1,000-Rs 1,500 per month, a steep increase that reflects heightened vulnerabilities. Buying early secures these low rates permanently, turning a modest monthly commitment into decades of unwavering protection.

The Cost of Delay: Financial and Health Impact

Your decision to buy a term insurance cover becomes even more crucial as your financial liabilities increase. “At 25, you may be relatively independent, but by 35, home loans, weddings, childcare, and parental support often can demand coverage of typically Rs 2-5 crore for an average middle-class household. Starting young allows you to grow your sum assured seamlessly as life milestones unfold, without the high costs of a later start. Waiting doesn't just increase the premium; it also risks new health issues that could make protection much harder or expensive,” says Sabyasachi Sarkar, MD & CEO of Go Digit Life Insurance.

In your 20s, good health is a natural advantage. But in your mid-30s, the realities of high-stress jobs and sedentary lifestyles often bring issues like hypertension or prediabetes to the surface. At this stage, insurers require medical checks that can lead to 20-50 per cent higher premiums or restricted coverage. Hence, waiting means you might face these hurdles or rejections exactly when your need for protection is the highest.

“The financial gap is hard to ignore. An extra Rs 500 monthly over 40 years adds up to Rs 2.4 lakh directly, plus Rs 90,000 or more in lost compounding returns at 7 per cent that could have been invested or utilized for your other financial goals. For early-career earners with annual incomes of Rs 5-8 lakh, the initial outlay feels negligible, akin to a utility bill; yet it evolves into a strategic fortress over time,” observes Sarkar.

Beyond Premiums: Inflation, Riders, and Tax Benefits

Inflation further underscores the importance of planning ahead. While fixed premiums defy 6-8 per cent inflation, preserving the purchasing power of your coverage, Rs 1 crore today may not suffice in 30 years. Opting for increasing term plans or periodic top-ups ensures your family’s financial security keeps pace with rising costs of education, healthcare, and living expenses.

Buying early also locks in affordable rates for valuable riders such as critical illness cover, accidental death benefit, and waiver of premium. Additionally, term insurance offers tax deductions under Section 80C and exemptions under Section 10(10D), making it a financially prudent choice beyond mere protection.

Convenience and Long-Term Value

Getting term insurance today is as seamless as any other digital experience. However, many still see it as an expense rather than a good investment. “Whether it's the myth that being single doesn't require cover or a preference for investments over protection, these delays can be costly. Recognizing these mental barriers is the first step towards securing your future while your age and health offer the best value. Ultimately, buying term insurance early is not just a financial transaction; it is a psychological anchor and a strategic investment in your family’s future,” says Sarkar.

A term plan offers the quiet confidence that your loved ones will remain financially secure, even amid life’s uncertainties. Imagine looking back at the age of 65. The premiums you started at 25 haven’t just provided cover, they have also turned into a foundation of irreplaceable security. It’s the same discipline we see when investing, but with a different mission of prioritizing your protection over market returns.

Use a term insurance calculator to determine your ideal cover. Buying term insurance early shows foresight, as it accounts for age, health, and liabilities while securing long-term financial stability.