Uncertainties regarding the family’s current and future finances may loom high in such scenarios. Hence, one might prepare themselves and their loved ones to combat the financial repercussions of such an event with the help of a 30-year term insurance plan.
What is a 30-year term life insurance plan? It is an insurance contract in which the insurance provider agrees to pay death benefit to the nominee(s) of the policy if the insured passes away, within a tenure of 30 years, subject to the terms and conditions stated in the policy.
A term insurance policy can be purchased for different tenures. Regardless, purchasing a plan for 30 years can be optimal for multiple reasons. Let us explain why.
Features and Benefits of a 30-Year Term Life Insurance Policy
Now that you may have an idea of what 30-year term life insurance does mean, let’s take a detailed look at its various features and benefits.
• Worry-free coverage for three decades
One of the reason one buys a term plan is for the life coverage. A term insurance plan provides financial relief to the policyholder so that, as long as the policy is active, their nominee(s) may not have to go through financial difficulties in their absence. Once you buy a 30-year term life insurance plan and pay premiums regularly, you can benefit from this relief for a tenure of three decades.
Term insurance plans do not require yearly renewals, but regular premium payments as per the chosen frequency. When the plan matures, that is at the end of 30 years, the life coverage ends. If you have opted for a return of premium feature and survive the policy term, then you can get a total of the premiums you have paid for the plan as maturity benefit, less the standard deductions stated under the policy.
• Offers the balance of life coverage and premium
Term insurance is one of the affordable ways to insure your life against unfortunate events. However, if you choose to buy term insurance for a very long period, such as 50 years, the total premium for the same can be high. This is because the coverage is being provided for a larger period of time.
However, going for too short a period may lead to lower total premiums, but it may also mean that your coverage ends sooner than you would like. Hence, it is appropriate to find a balance between these two aspects.
• Premiums may be affordable
Those in their 20s or 30s buying this kind of term insurance plan may be able to enjoy the benefit of relatively affordable premiums. Life insurance companies usually take your age and health into consideration. The premiums for younger people tend to be lower, as compared to the older people. Typically, the premium amount increases by 8 to 10 % with every year of age2.
• Optional riders available with the plan
You may know what does the basic coverage of 30-year term life insurance mean, but would it be sufficient for you in the long run? As the main breadwinner for your family, there may be multiple incidents and risks that you may need financial protection from to secure your family’s financial future. This is where riders come into view. These are optional add-ons that can be added to your basic policy at the cost of an increase in the premium.
Some popular riders you can avail are the critical illness benefit rider, the accidental permanent disability rider, the accidental death rider, the waiver of premium add-on, and so on.
Who Should Buy a 30-Year Term Life Insurance Policy?
Even though you may now know what 30-year term life insurance is and its various benefits, you may still be wondering if such a plan would be the preferable option for you. To help you out, we list down the type of people for whom a 30-year term plan might be a suitable purchase.
• Those who are starting a new family
If you are newly married or have recently had kids, then a plan that offers coverage for 30 years may be a wise option. The tenure is long enough to ensure that your spouse and kids get protection until your kids are financially independent and/or well-settled.
• Those who plan to retire in 30 years
Many people want coverage for as long as they are working so that their family does not get affected by a lack of income in their absence during this period. Once they retire, they may plan to have another source of income (business, returns from investments, for instance). Hence, people who have planned their future in such a way as they intend to retire within a span of 30 years of their career, then a 30-year term life insurance policy could be a suitable idea for them.
• Those who have taken a long-term loan
Suppose you have taken a home loan that has a tenure of 30 years. As long as you are present and have a source of regular income, the repayment of the loan can be taken care of by you. However, if an unfortunate event happens to strike you and you would no longer be around or capable to repay the loan, your family will have to shoulder the responsibility.
If they do not have a financial backup in place, then such a responsibility can easily become a burden and lead to serious financial worries. A term insurance plan with a similar tenure can prove to be the preferable solution here. The benefit received from the plan can assist your loved ones in repaying the outstanding loan when you are no longer around.
How to Select 30-Year Term Life Insurance?
If you are planning to buy a 30-year term life insurance policy, then you must not only know what does it mean but also know how you can choose the suitable plan to get its optimum benefits.
Before you finalise a plan, consider taking a detailed look at your budget for term insurance, your coverage needs, your goals and objectives, and so on, to get a realistic idea of what you need and whether you can afford it.
Understand the situations you are at most risk for, and then choose your coverage and add-ons accordingly. Use the term insurance calculator to get an estimate of the premiums for the chosen coverage. Reaching out to an insurance agent or an advisor can also help.
Conclusion
When you buy a 30-year term insurance policy that offers the coverage you need, you are allowing yourself to breathe easy and have a peace of mind. Why? Because, for the next 30 years, you can be rest assured that your loved ones can live a life of financial dignity even if you are not around.
FAQs
1. What is the premium rate for a 30-year term insurance policy?
The premium of such a plan depends on several factors, including age, risk factors, health history, occupation, and so on. To get an estimate of what your premium could be, you can use a term insurance calculator.
2. Can the policyholder surrender a 30-year term insurance plan?
If you are unable to pay the premiums or simply do not wish to continue the plan, then you can indeed surrender the policy subject to the terms and conditions stated in the said policy. However, this would mean that you and your family members are bereft of life insurance coverage and buying a new one may prove to be costly, so one must proceed cautiously.
3. What does the end of 30-year term insurance mean if the policyholder survives the maturity?
If it is a pure term life insurance plan, then, no benefit is paid on survival of the policy term, and the policy will terminate after the 30-year policy term. If the policyholder has opted for return of premium feature with the term plan, the premiums will be paid out as maturity benefit, subject to terms and conditions stated in the policy. If they wish to, they can convert the plan into a whole life insurance plan provided the insurer offers the option. It can provide coverage till the policyholder is 99 years of age.
Sources:
1https://news.abplive.com/science/world-heart-day-2022-70-of-heart-attack-deaths-last-year-occurred-in-30-60-age-group-1555818#:~:text=The%20number%20of%20deaths%20due%20to%20heart%20attacks%20in%20India%20has%20remained%20consistently%20over%2025%2C000%20in%20the%20last%20four%20years%2C%20and%20over%2028%2C000%20in%20the%20last%20three%20years%2C%20according%20to%20data%20on%20%22Accidental%20Deaths%20%26%20Suicides%20in%20India%22%20(ADSI)%20compiled%20by%20the%20National%20Crime%20Records%20Bureau%20(NCRB).%C2%A0
2. https://www.investopedia.com/articles/personal-finance/022615/how-age-affects-life-insurance-rates.asp
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