What Should Be the Duration of a Term Insurance Plan?

Written by : Knowledge Center Team

2026-01-02

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Choosing the right tenure for a term insurance plan you are planning to buy can often lead to confusion. If you decide on a shorter duration, the protection won't be enough for your financial needs. If you choose a prolonged period, you will pay more premiums than required. That is the reason it is essential to choose the right length of your term insurance policy, considering your financial needs.

A term insurance plan covers you for a certain period or 'term' of your life. If the policyholder passes away within the policy term, the death benefit is paid to the beneficiaries/nominees. Hence, choosing the right duration of your term insurance plan is a crucial factor for your family's financial protection.

Key Takeaways

The general age range for purchasing term insurance is between 18 and 65 years, but some insurers extend coverage up to 75-99 years.

Premiums are significantly lower if you purchase a term plan early in life, as insurance costs rise with age.

Your term plan should align with key financial milestones, such as marriage, home loans, children's education, and retirement planning, to provide adequate financial security.

Smokers and alcohol consumers may need longer coverage with critical illness add-ons as health risks increase over time.

While short-term plans require renewal (with increasing premiums), long-term plans offer stable, fixed premiums and coverage for up to 99 years with select insurers.

What is the Term Insurance Age Limit?

To ensure the best term insurance plan coverage, it is important to know till what age term insurance should be taken. The term insurance age limit typically ranges from 18 to 65 years old. However, it can vary depending on the insurance provider and the specific plan. Experts suggest that the best age for term insurance is while you are young.

While some insurers offer coverage up to 70, getting a term life policy becomes more challenging as you age. Premiums also tend to rise significantly after a certain age. Therefore, it's generally recommended to purchase term insurance earlier in life for the most affordable rates and the widest range of options.

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What are the Different Term Insurance Age Limits?

There are two main types of term insurance age limits to consider:

Minimum Age Limit: The minimum term plan age limit is typically set at 18 years old. At this age, you're considered an adult and can enter into financial contracts like insurance policies.
Maximum Age Limit: This varies more widely between insurers and can range from 60 to 70 years old. Some insurers may even offer plans up to 85 for specific products like guaranteed issue life insurance. However, it becomes increasingly difficult to qualify for term insurance as you reach these upper limits.

How to Decide the Duration of Your Term Plan?

Generally, it is said to have the term plan active during your working years. So, it depends on the age at which you buy the plan. But is age the only factor that will help you decide the duration of your term plan?

Three other things to be considered while choosing the duration are - your financial goals, liabilities, and lifestyle habits.

Let us understand these factors in detail.

Financial Goals:

In life, you will have various milestones to achieve. For example,

You get married
Plan for a kid
Save for the higher education of your kid
Create a corpus for your retirement

You need to think about the financial protection of your loved ones on each of these milestones. With a term plan, if something happens to you, the death benefit will help your family cope with the financial loss.

Liabilities:

The term insurance cover should pay for any liabilities that you have. For example, if you have a home loan. You pass away without repaying it. A term plan will help in repaying the remaining unpaid amount. It will take off the financial burden your family may have to bear in your absence.

Lifestyle Habits:

If you have any lifestyle habits such as consumption of tobacco or alcohol - then you must rethink the duration of your term plan. Such practices may lead to a higher susceptibility to critical illnesses. Treatment of these illnesses is expensive and may cost people their lives. A term plan with critical illness cover may help to manage the cost of such treatment.

Did You Know?

India's life insurance premiums are projected to grow 9% in FY26 to ~₹12 lakh crore, driven by term plans amid rising awareness.

Source: Economic Times

What is the Ideal Duration of a Term Plan?

Most life insurance companies offer coverage for up to 75-85 years of age, while some may offer coverage till the age of 99. It varies from insurer to insurer. Evaluating the correct duration of a term insurance plan is critical. You need to plan for the finances if something happens to you. Let us understand what happens when you buy a term plan at different ages:

In your 20s: Buying term insurance depends on your current age and retirement plans. Let's say you are in your 20s and are likely to retire by the age of 60. You must go for a 40 year term plan. It will get you covered until your desired retirement age.

It is good to think and plan for your future. If you buy a term plan at this age, the premium will be low. It will be affordable for you. Hence, it is always said to buy a term insurance plan as soon as you start working.

Understand the reason you should buy a term plan early.

In your 30s and 40s: When you enter your 30s or 40s, you will likely get married and start your family. Now that you have people who are dependent on you, you should start thinking about buying term insurance plans.

At this age, you should opt for a duration of 35 year term insurance, depending on your financial needs and retirement plans or employment type.

In your 50s and 60s: When you are older, around 50-60 years of age, by this time, your children will likely be settled, and the burden on you to work and pay bills will be low. At this age, you can opt for a term plan for a 15-year term.

Read to know - if you should buy a term insurance plan in your 50s.

The premiums you will pay in a term plan will remain the same throughout the policy tenure. However, remember that the premium amount depends on a wide range of factors, such as age, gender, lifestyle habits, occupation, etc.

Take your retirement age into consideration while deciding on the term cover. Ask yourself questions like how long your family members will be dependent on you financially and when the liabilities you have are over. Such questions will help you gauge the right answer.

When to Choose Short-Term Vs. Long-Term Plans?

When selecting a term life insurance policy, it is crucial to understand whether a short-term or long-term plan is right for you. The decision depends on factors such as your age, financial responsibilities, and long-term security goals. The table below compares both options to help you make an informed choice.

Factors	Short-term Plan	Long-term Plan
Ideal For	Young professionals, individuals with temporary financial commitments	People with dependents, those looking for long-term financial security
Premium Costs	Lower initially but may increase upon renewal	Higher but fixed for a longer duration
Financial Goal	Covers short-term liabilities like loans, rent, or temporary income loss	Ensures financial protection for dependents over an extended period
What Age Does Term Life Insurance Expire?	Usually expires at the end of the chosen short-term period	Can extend up to the term insurance age limit, usually 75–99 years
Best Choice For	People with uncertain financial plans or those nearing retirement	Families, business owners, or individuals seeking lifelong coverage
Renewability	Requires periodic renewal, which may lead to increased premiums	No need for renewal; offers stability and continuous protection

Final Words

Choosing the right term insurance duration is crucial for securing your loved one's financial future. Ideally, your coverage should end when your dependents are financially independent, typically between 55 and 65 years old. Consider your financial goals, liabilities, and lifestyle habits when determining the optimal term length. Remember, purchasing a term plan early in life allows you to lock in lower premiums and provides valuable coverage throughout your working years. Consult a financial advisor to create a personalised plan that aligns with your specific needs and life stage.

Glossary

Term Insurance: A life insurance policy that covers a specific period (term) of your life.
Death Benefit: The amount of money paid by the insurance company to the beneficiaries upon the policyholder's death.
Critical Illnesses: A life-threatening health condition that requires significant medical intervention
Liabilities: Your financial obligations, such as outstanding debts like a home loan.
Policy Term: The duration for which a life insurance policy remains active, ensuring coverage as long as premiums are paid

FAQs Realted to Term Insurance Plan Duration

Ideally, your term insurance coverage should end when your financial dependents no longer rely on you. This could be when your children are financially independent, or you've paid off your debts like a home loan. Typically, this falls between 55 and 65 years old.

No, term plans typically don't offer renewal options after the policy term ends. However, you can explore buying a new term plan if you're still within the eligible age bracket (usually up to 65 years old).

No, most standard term plans don't allow changing the duration after purchase. However, some insurers might offer convertible term plans where you can convert your term plan to a whole life insurance policy with a longer duration, but typically at a higher premium.

Your age significantly impacts term duration. Generally, younger individuals (in their 20s-30s) can opt for longer terms (30-40 years) to cover their working years and family needs. As you age (50s-60s), shorter terms (10-15 years) might suffice, depending on your financial goals.

Yes, it can be beneficial. A term plan ending around your retirement age ensures your family has financial support even if you pass away during retirement when they might still have financial needs.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.