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By definition, term insurance is a pure protection plan designed to provide financial security to your family in the event of your untimely demise. Traditionally, the duration of such plans aligned with your income-earning years, typically until retirement. However, with insurers now offering coverage till age 85 or even 100, the lines between term insurance and whole life policies have begun to blur.
Sujeet Kothare, Executive Vice President, Marketing, Products and Propositions, Tata AIA, emphasizes that term insurance plays its most crucial role in the early and middle stages of life. According to him, once individuals reach 60–70 years of age, the focus should shift from income replacement to retirement security.
“By age 60 or 70, your priority should be financial stability during retirement,” says Kothare. “Retirement plans, not term insurance, are more suited for this phase, offering income streams, inflation protection, tax benefits, and customization options that term plans lack.”
Mumbai-based MFD Harshad Doshi of Positive Wealth offers a different perspective. He notes that while many choose term plans aligned with their working years, others opt for longer durations even up to 100 years to ensure the sum assured eventually pays out.
“A 100-year term plan guarantees execution at some point, so it can be viewed as part of one’s debt allocation,” Doshi explains. “In a falling interest rate environment, a tax-free term payout can act as a guaranteed legacy.”
Ritesh Sheth of My Funds Guide recommends aligning term insurance with your working years and financial responsibilities. “If you plan to retire at 60 and your liabilities end then, a term plan beyond that may not be needed,” he says. “Your retirement corpus should take care of your later years.”
Sheth suggests coverage of at least 10 times your annual income. He only recommends longer-term plans (up to 100 years) if the goal is to leave behind a financial gift or legacy because death at 100 years of age is most likely.
Mumbai MFD Sadashiv Phene echoes this logic, advocating term coverage from a young age until around 60. According to him, the core purpose of term insurance is to protect against responsibilities like home loans, children’s education, and family expenses — all of which usually taper off by retirement.
So, what’s the ideal duration?
There’s no one-size-fits-all answer. However, general consensus among experts leans toward:
Term plan till retirement age (60–65 years): Ideal for most people with the goal of income replacement and protecting against liabilities.
Term plan up to 85–100 years: Suitable only if you view it as a legacy planning tool, or part of a broader estate or debt allocation strategy.