Expert advice

Oct 06, 2014,16.58 IST

When should one opt for term insurance plan?

Harshvardhan Roongta
Roongta Securities

Theoretically speaking, if you don’t have dependents then there is no need for you to buy a term cover.

However, considering two aspects :- a) Premium costs b) Health condition, it makes a lot of sense to buy the term cover even if you donot have dependents currently.

A) Premium costs:  
The premiums for online term plans are so nominal that it really does not cause a stress on your finances.

Take an example, if you are a 30 yr old healthy person and want to buy a Rs. 1 Crore online term plan for a 30 yr period (coverage till your age 60 yrs), you would get the same for about Rs. 10,000 per year (less than a 1000 rupees per month) .I am sure, you are spending this amount in one movie outing itself.

If you evaluate closely, this premium outflow isn’t going to really disrupt your cashflows nor is it likely to cause a major stress on your monthly budgets.

B) Health condition:
A very important reason you should consider buying a term plan even now, is that you would be healthy and medically fit right now. An insurance company will require you to undergo pre-insurance medical tests before offering to cover the risk.

Getting a life cover becomes very difficult incase you contract an illness. So now when “all is well” you should get yourself covered as you donot know how sometimes life surprises you.

God forbid, by the time you have dependents and unfortunately, by then have contracted some illness, then you might not get the cover at all.

Therefore, considering the nominal premium costs and the current health condition, you may buy yourself a term plan inspite of not having any dependents.

(The writer is a CERTIFIED FINANCIAL PLANNERCM  with Roongta Securities and can be reached at

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