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Policy Term in Term Insurance Plan
Term Insurance

How to decide Policy Term in Term Insurance

Buying a wrong or inadequate Term insurance cover can defeat the whole purpose of buying insurance. Just like an umbrella, Term insurance is meant to cover you during the rainy days of your life and it should last as long it rains. So along with the amount of the cover, the duration of the policy is also a key factor to be considered. In this article, we will explain how to decide upon the Policy Term in a Term Insurance Plan.

The factors to be considered while determining the policy term are

  • Age
  • Outstanding Liabilities
  • Goals and Priorities
  • Affordability, etc.


Term policies are available for 10, 15, 20, 25 & 30 years. If your current age is around 30 then you should look for a term plan of around 25 to 30 years, which could be your retirement age, as until then your family will be dependent on your income.

Outstanding Liabilities

If you have a home loan or any other liability say for a period of 20 years then it is advisable to choose a term plan for at least the same number of years so that your family is not burdened with the pressure of clearing your debts. So asses your liabilities and decide the policy term.

Goals and Priorities

If you have a child and have a long-term goal such as a child’s higher education, marriage, etc. then you need to select a policy term which can accommodate these important events of your life. For example, if you have a child who is 3 years old and would need funds for higher education after 15 years then your policy should be for at least 15 years.


Term plans are usually expensive when taken for a longer tenure but it is cheaper when taken at an earlier age. So take your income, expenses, inflation rate & future commitments into consideration while deciding upon the policy term. Don’t commit for a very high premium which you may not be able to pay for a longer period.

So consider the above factors and compare the policies online to find a Term Plan that best suits your needs.



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