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I am in my 40s. Can I still save on term insurance premiums now?

10 Oct 22      |       | ShareShare Share Blog Or copy link Copy Share this link via

Authored by: Anurag Ainapurapu
Reviewed by: Krupa Kenia

The Long Read


Everything you *need to know* is right above this. Scroll down, only if you'd still like to read more (honestly, why?)

While the best time to buy term insurance is when you are young, if you’re over 45 and want to buy it, you can still save money by following these tips: 

 

  • Cover yourself only till you retire because an unnecessarily long policy duration will further increase your premiums

 

  • Don’t overinsure. Choose a life cover that will replace your income till you earn. Higher the cover, higher the premium. So choose only as much as it is required to keep your family financially secure after you pass away

 

  • Add only the essential riders. Otherwise, your premium will become more expensive. 

 

  • Choose a premium payment term as per your convenience. Depending on your cash flows, opt for single, regular or, limited pay. 

 

  • Buy online if you know what you need to buy. Term insurance plans can be 5-10% cheaper when bought online. 

 

  • Compare term plans from different insurers to choose the best premium rate and policy benefits.


Check out the KlarifyLife Term Guide to understand your exact term insurance needs.

No, you should not, especially if you have loved ones who are financially dependent on you. 

 

In your 40s, you may still have many financial responsibilities such as:

 

  • Ageing parents to care for

  • Child’s education and upbringing

  • Ever-increasing household expenses and healthcare costs

  • Debts to pay off such as home loans

 

Your untimely demise can put your family in a massive financial crisis. You wouldn’t want that for them, would you? That’s why term insurance is a must-buy. 

 

We understand that in your 40s you may be a little late in life to buy term insurance. You will be charged higher premiums and certain riders may not be available for you. 

 

But better late than never, right? Now is as good a time as any to start taking the right steps towards protecting your family. 

 

So, speak to your insurer, an insurance agent or even your financial advisor and understand how to buy a term insurance policy that caters to your needs at this stage in your life. 

 

Remember, do not delay buying it further.

Yes, you should. 

 

A group term insurance policy is a great employee benefit. But you still need to buy an individual term plan, because a group term plan has the following drawbacks:

 

  • The life cover offered will never be enough to meet your family’s financial requirements when you pass away

  • The plan offers limited customization benefits unlike your individual term plan which can be customised to your and your family’s needs

  • The plan will get discontinued and you will lose coverage when you quit your job 

  • Your employer can discontinue or change the cover of the plan any time they want

  • You can’t renew or extend a group term plan after retirement (varies from insurer to insurer)

  • Your group term plan may or may not come with add-on benefits like critical illness rider and other disease coverages. 



So, don’t rely only on a group term insurance plan for your family’s future financial security. Instead buy an individual term plan that is customised to your needs. And don’t forget, getting an individual term plan after you retire will be very expensive so it’s best to get one right now.

Yes, it is a possibility. 

 

Firstly, let’s understand the key reasons why your term insurance application can get rejected: 

 

  • Specific health issues

  • Age

  • Hazardous occupation

  • Dangerous hobbies

  • Poor lifestyle choices

  • Income limitations

  • Past criminal record 

  • Previous application declines

  • Falsifying information

  • History of declined applications

 

In your 40s, you may have been diagnosed with health problems like diabetes or heart diseases. Or you may have acquired unhealthy lifestyle habits like smoking and drinking. You may have even picked up a dangerous hobby or switched to a risky profession (exciting for you, not so good for your term plan application). 

 

Any of these factors can result in your term insurance application getting declined. 


Find out in detail why your insurer may reject your term insurance application even if you are eligible to get one.

Not necessarily. 

 

See, at the time of term insurance application, you have to inform your insurer if your immediate blood relations suffer from health disorders such as heart disease, diabetes, cancer etc. because you are at a higher risk of developing these problems. 

 

If there's a family history of chronic illnesses, insurers will enquire about:

 

  • Your own medical conditions

  • Age of death of certain family members

  • Any pattern of untimely deaths 



But ultimately, what matters the most to them is your personal health profile. Upon assessing your health, they may ask for extra medicals, or consider a premium increase if 

 

  • Your family health history has multiple cases of diseases or health conditions such as diabetes, heart diseases or cancer

  • These diagnoses occurred before they turned 60

 

Only if the said medical conditions appear in your medical tests, only then you may be charged a higher premium. Remember, this requirement may vary from insurer to insurer.

 

Hence, keep your fingers crossed that your health conditions are okay.


So, no matter what your family health history is, apply for term insurance as the chances of application rejection are minimal and that of a premium hike is low.

Simple. That’s because you are likely to be healthier when you are younger. With age, you may be at a greater risk of developing certain diseases like diabetes, cholesterol, heart diseases etc. As a result, there is a lot of potential risk in offering you a term plan. Consequently, insurers charge you a higher premium to offset this risk.


Find out more about the circumstances under which your term insurance premium can increase.

Yes. Besides your age, there are several other factors that have a direct impact on your term insurance premium. 

 

  • Gender - If you are a woman, you are more likely to get cheaper term insurance premiums than if you are a man 

 

  • Medical history - Your premium may go up if your medical tests reveal any health conditions such as diabetes, cancer, or heart disease

 

 

  • Lifestyle - Unhealthy lifestyle habits such as smoking, drinking alcohol, or a sedentary lifestyle can increase your premium

 

  • Occupation and vocation - Your premium can increase if you are in a high-risk occupation, such as a stuntman or a pilot, etc. or you pursue high-risk hobbies like rock climbing, racing, etc.



Find out in detail about the factors that can increase your term insurance premium.

Your term policy should cover you till the age you plan to retire. 

 

Here's something you should keep in mind that will help you understand this better:

 

Term insurance is like a replacement of your income when you are no more. 

 

So you need to stay covered only till you have financial responsibilities and your loved ones are dependent on your income. That's all. You don't need to pay an extra premium amount by staying covered longer than that.

 

So, if you are a salaried individual, your age of retirement would typically be 60-65 years (unless of course, you plan to retire earlier). Your plan should cover you till then. 

 

If you are an entrepreneur, your retirement is more likely to be much later. So, you may want to cover yourself for a longer duration till the time your family is dependent on your income. 

 

And if you are a homemaker, you should stay covered till your children or your ageing parents or anyone else who is dependent on you financially or for your caregiving will become independent.

It sounds like a good idea but you really shouldn’t. Here’s why: 

 

  • Your term insurance payout takes care of your family’s financial needs such as household expenses, child’s education, elderly care, mortgage payment, and so on if you were to pass away unexpectedly during the policy duration. But by the time you retire, you are likely to have fulfilled most of your financial responsibilities. 

 

  • There is also a high possibility that your financial dependents would no longer need to rely on your income anymore

 

  • Also remember, your term insurance policy premiums depend on the number of years you are covered for. The longer the policy duration, the more expensive premiums can be. So, if you get covered for an unnecessarily long duration such as 99 years, which is beyond your retirement age, you may end up paying expensive premiums. You are better off investing that additional amount elsewhere as your term insurance plan won’t give you any maturity benefit anyway. 

 

PS: You may only want to cover yourself for 99 years if you plan to use your life insurance policy for estate planning, i.e. as a part of your wealth distribution plan, you want to pass down the policy money to your kids/spouse/other family members after you pass away.

Simple, if you have to choose between a ₹ 2 crore cover till 65 years and a ₹ 1 crore cover till 85 years, you should always choose the former i.e. a term insurance plan with a high life cover and lower term. 

 

This option is always better because it gives a higher payout and covers you for the right duration of time. 

 

Even if you want to choose the 2nd option because of longer coverage and lower premium remember this:

 

Term insurance will just replace your income and help your family financially in your absence. So you don't need to stay covered for so long since by then you’ll have met most of your financial responsibilities and your family may not be dependent on your income anymore. 

 

Here's another thing to take note of: thanks to inflation, the value of a ₹ 1 crore will be diminished by the time your family gets it.


So long story short, always choose the term plan with the higher cover and shorter term.

Yes. Unfortunately, your term plan application may get rejected on medical grounds if you plan on buying it late in your life. 

 

With age:

  • You may have acquired some unhealthy lifestyle habits such as smoking and drinking that affect your health

  • You may also have higher chances of developing medical conditions or diseases

 

Result, your term insurance application can get declined because there’s too much risk involved in offering you a plan.

 

Remember, depending on your health status, the insurer can increase your premium or postpone your application to a later date (that is they will review your application again when your health improves). 

 

Find out what you can do if your term insurance application gets rejected on medical grounds.

 

No, you should not. We understand that being in your 40s, you may be at a higher risk of developing health conditions (physical and mental).

 

But not disclosing accurate and relevant information about them at the time of application can result in a claim rejection later on. 

 

If at the time of processing your death claim, your insurer finds out that the main cause of your death was this pre-existing underlying health condition that they were not aware of, they can investigate and reject your claim, resulting in a financial crisis for your family.

Yes, you can, but buying a term plan without medicals is not advisable at all because such term policies usually offer lower coverage which may not be enough for your family's financial requirements in your absence. Additionally, your insurer will pay for your medical tests (varies from insurer to insurer)

 

Understand this:

 

Medical tests help your insurer assess your health properly and offer you the right plan accordingly. Sure, your premium is likely to be expensive, but ultimately you know your family will receive an adequate payout and be financially secure.

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