Families across India are experiencing financial risks without even knowing it. These families are not missing out on life insurance; they just do not feel as though they have enough time to get it. In India, life Insurance penetration has declined to 2.7% of GDP (gross domestic product) for FYs (fiscal years) 2024-25 for three consecutive years, but total life insurance premiums have been more than Rs.8.86 trillion. The country with the lowest average rate of life insurance is India, with a 7.3% global average. As a result, India has one of the largest life insurance coverage gaps among large economies worldwide.
The issue is not just a lack of awareness. Many people want to buy life insurance, but they keep putting off buying it. This guide is not meant to hurry you into buying life insurance. The purpose of this guide is to ask you one additional question: what is the financial impact associated with delaying your purchase of life insurance at this point in terms of your current age and time of life in 2026?
Why 2026 Is the Most Compelling Year to Buy Term Insurance?
There are three structural changes occurring now which should make it the easiest time in history for anyone to obtain a term insurance policy.
1. Introduction of Zero GST on Term Insurance: As of September 22nd, 2025 the Indian government has reduced the GST on Term Insurance from 18% to Zero GST. This change will enable a larger segment of the population to afford and access a Pure Protection Plan without paying a GST on newly purchased or renewed Term Insurance Policies after the date of this change.
2. Launch of “Bima Sugam”: In September 2025, the Indian Federation of Bima Sugam was launched by IRDAI to provide/implement a service similar in function to UPIs but specifically for insurances (insurance is the equivalent to a UPI). The launch of Bima Sugam is the first time that consumers will be able to compare all Term Insurance plans approved by IRDAI across all insurers on a single centralized, neutral, and fully interoperable platform with all pricing information disclosed to the consumer before they purchase a plan. Bima Sugam will eliminate any transaction bias because agents/brokers will not receive commission or any other monetary incentives from the insurer for placing a Policy with them.
3. Allowance for 100% FDI in the Insurance Sector: The inclusion of 100% FDI in the Insurance Sector will create an increase in competition within the industry and will generate an increase in innovation in Term Insurance Products.
At what age should you buy term insurance in India?
The best age to buy term insurance in India is usually between 22 and 30, when premiums are lowest and policy terms can stretch for 30–40 years. Buying early also helps you lock in lower rates before age or health conditions increase your premium. For most buyers, delaying even by 5–10 years means paying significantly more for the same cover.
When is the Right Time to Buy Term Insurance?
In Your 20s: Lock In the Lowest Premium
In your twenties, you are in an excellent position financially to purchase a term life insurance policy. Insurance rates are calculated with risk as the element; therefore, at age 25 years old, you have the lowest risk for most of your life. You will therefore be able to achieve the best premiums possible for a term life policy who is a healthy non-smoker will be able to secure Rs.1 crore of term life insurance for Rs.522/month, which is less than most subscriptions are monthly. Most importantly, as long as you have this policy, you will never see an increase in the amount that you will pay over the life of your purchased term life insurance policy.
If you are in your 20s, you should choose a policy with a term of 30-35 years, purchase at least 15-20 times your annual income in coverage, and purchase online from an IRDAI-approved insurer to get another 10-15% discount.
To see how much premiums vary, you can compare a 25-year-old healthy male’s term life insurance premium of Rs.9,524/year for Rs.1 crore of coverage with a 35-year-old male’s premium of Rs.15,377/year for the same coverage; the only factor that has changed is the additional ten (10) years in the age of the insured.
How much term insurance cover do you need based on your income?
A common rule is to buy term insurance worth 10 to 20 times your annual income. For example, if you earn Rs.10 lakh a year, you should usually consider at least Rs.1 crore to Rs.2 crore in cover, depending on loans, children’s education, and your family’s future expenses. A more accurate approach is to use the Human Life Value (HLV) method, which factors in income, liabilities, and long-term goals.
In Your 30s–40s: Protect What You’ve Built
In your 30’s and 40’s, typically, you have the greatest number of financial responsibilities. A mortgage, small children, aging parents, and a household dependent on your paycheck. Therefore, there is the greatest financial risk associated with not having term insurance at this time.
At this point in your life, the primary consideration should be to make sure you have adequate financial protection versus just having term insurance, as a term plan bought for Rs.25 lakhs five years ago may not accurately represent your financial obligations anymore.
You should regularly review your sum assured against your outstanding debts, your children’s anticipated college costs and your family’s living costs for 10-15 years ahead.
Another consideration when reviewing your policy is to ensure that you have a term set up until your youngest dependent becomes financially independent, which usually takes place by the time you reach 60-65 years of age.
Also, you should consider that a male smoker at 30 years old, if he purchases a Rs.1 crore policy for a 30-year policy term, will pay about 100% more in premium compared to a non-smoker. If you quit smoking during the term, most insurers will allow you to re-evaluate your smoking status at each renewal age or at least every 3 years and give you a lower premium at that time.
What should be the ideal policy term for term insurance?
The ideal policy term should usually last until your major financial responsibilities end, typically when your youngest dependent becomes financially independent or until you reach 60 to 65 years of age. For example, someone buying at 25 may choose a 35-year term, while someone buying at 35 may choose a policy that runs until retirement. The goal is to match coverage with your earning years and family obligations.
In Your 40s: Increasing Cover and Inflation Protection
At around 40, there is often a change in how you focus on maintaining your existing health insurance coverage with regard to protecting its real value from inflation. Inflation reduces your purchasing power, so Rs.1 crore looks good today but could not provide your family with the necessary financial support that they may require in 20 years.
Some term insurance is now being offered by way of an increasing cover option whereby the sum insured is increased by 5 to 10% each year with no medical underwriting. This means that your family will be covered by an increasing amount of policy to keep up with inflation rates as the cost of living increases. If this is not available on your current insurance policy, you may also want to consider going for a new life insurance policy in your 40’s to have a possible top-up at a potentially higher premium.
Does delaying term insurance increase your premium?
Yes, delaying term insurance almost always increases your premium because insurers price policies based on age and health risk. A person buying at 25 will generally pay much less than someone buying the same cover at 30 or 35. The longer you wait, the more likely your premium rises permanently, even if the sum assured stays the same.
In Your 50s: Legacy and Estate Planning
When you reach your 50’s, purchasing or renewing a life insurance policy is usually a matter of developing your future legacy. You will pay higher premiums now than you would earlier in life, and you will have to go through an underwriting process most likely. However, a 15 year term life insurance policy that is purchased at age 50 will provide an added purpose; such as providing for an outstanding mortgage or providing for your spouse financially after your death or giving your dependents a predetermined amount of money at the time of your death.
If you decide to purchase an insurance policy, consult with a financial planner to add this insurance policy into your estate plan in conjunction with your will, completing and implementing a nomination and establishing a plan to pay off your debts prior to your death.
How Much Term Insurance Coverage Do You Actually Need?
Generally you can use a guideline of 10-20 times annual salary as starting point for your ‘Base Sum Assured’. For example if a 30-year-old earns Rs.10,000 per year the minimum amount needed for Term Insurance coverage would be between Rs.1,00,000 to Rs,1,50,000.
Another method to arrive at your “correct” amount of Term Insurance required is to use Human Life Value (HLV). This calculates the present value of future income less anticipated personal expenses; in other words, what would your family lose if you were not here. Most insurers licensed by IRDAI have free HLV Calculators located on their websites.
Another way of calculating Term Insurance is to take an equation approach: Sum Assured = (Annual Salary x Remaining Work Life) + Total Outstanding Debt + Future Expenses (Children Education, Kids Marriage, Spouse Provide for Retirement).
Age-Wise Premium Comparison Table
The figures below are indicative premiums for Rs.1 crore term insurance coverage from IRDAI-approved insurers, post the 0% GST reform. Actual premiums vary by insurer, health profile, and policy features.
| Age | Gender | Smoking status | Indicative monthly premium | Policy term | Source |
| 25 | Male | Non-smoker | ~Rs.522/month | 35 years | Policybazaar, IRDAI-approved insurer data |
| 25 | Female | Non-smoker | ~Rs.461/month | 30 years | Policybazaar, IRDAI-approved insurer data |
| 30 | Male | Non-smoker | ~Rs.700/month | 30 years | Insurer portals, Q1 2026 |
| 30 | Male | Smoker | ~Rs.1,400/month | 30 years | Insurer portals, Q1 2026 |
| 40 | Female | Non-smoker | ~Rs.1,642/month | 30 years | Policybazaar, IRDAI-approved insurer data |
| 45 | Male | Non-smoker | ~Rs.1,199/month | 20 years | Policybazaar, IRDAI-approved insurer data |
Premiums are approximate, exclusive of applicable taxes and levies, as of 2026. Verify current rates on official insurer portals before purchasing.
Top IRDAI-Approved Insurers by Claim Settlement Ratio (FY 2024–25)
When choosing a term insurance plan, the claim settlement ratio (CSR) is one of the most important trust signals. It measures what percentage of death claims an insurer paid out in a given year.
| Insurer | CSR FY 2024–25 | Source |
| Axis Max Life Insurance | 99.70% | IRDAI Annual Report 2024–25 |
| HDFC Life Insurance | 99.68% | IRDAI Annual Report 2024–25 |
| Tata AIA Life Insurance | 99.41% | IRDAI Annual Report 2024–25 |
| LIC of India | 98.15% | IRDAI Annual Report 2024–25 |
A CSR above 98% from an IRDAI-approved insurer is considered a strong indicator of claims reliability. For a deeper comparison of insurer features, riders, and policy terms, refer to our complete term insurance buying guide.
3 Common Myths About Buying Term Insurance Busted
Myth 1: “I’m young and healthy, I do not need it right now.” The most expensive myth in personal finance will be when the best time to commit to a low premium price is when you are young and healthy. That’s why insurance companies give their best premiums during these times. Every year you wait to purchase insurance cover will permanently add to your premium.
Myth 2: “I’ll be in a better financial position to make this purchase later when my financial situation is more stable.” As your financial responsibilities grow over time, you will have a greater number of dependents, larger loans and higher financial stakes. The financial costs of waiting are significant: waiting to purchase a Rs.1 crore policy from when you are 25 until you are 35 will cost you at least Rs.5,000 more per year, every year, through the life of the policy.
Myth 3: “The group term insurance policy that I have with my employer will be sufficient for my family.” The group term insurance policy provided by your employer is not portable, is not yours personally and usually has a benefit limit of only 2-3 times your salary; which is much less than the recommended coverage limits of 15-20 times your salary. If you are no longer employed with the company that provided the group policy, you will no longer have that insurance policy’s coverage. A personal term insurance policy provides you with the same coverage, regardless of your work location.
Final Thoughts: The Right Time Is Now
At every stage of life, there’s a compelling reason to purchase term insurance and a huge cost for delaying this. When you’re in your 20s you can buy at the lowest premium available, in your 30s and 40s you’re buying to protect people and obligations that matter to you and in your 50s you are being deliberate about managing your legacy.
By 2026, the ability to purchase affordable term insurance will be at its highest level ever, with three factors in place: there will not be any GST on individual term plans, the launch of Bima Sugam which is India’s first transparent insurance market place and the entrant of 100% new (FDI) foreign direct investment will make this market more competitive than it has ever been. There is no sound rational reason for any consumer to delay.
You can easily compare all IRDAI-approved companies offering term insurance online, calculate your Human Life Value and help ensure financial security for your family at the lowest available premium rate in India.
Frequently Asked Questions
1. At what age should I buy term insurance in India?
The earlier the better, ideally between 22 and 30 years of age. Premiums are at their lowest, policy terms can extend up to 35–40 years, and you lock in your rate before any health conditions can affect your eligibility.
2. What is the right policy term for a term insurance plan?
Your policy term should cover you until your youngest dependent is financially independent, typically until you are 60–65 years old. If you are 25 today, a 35-year term is a sound choice.
3. Does the 0% GST apply to all term insurance plans in 2026?
Yes. The GST exemption applies to all individual life insurance policies, including term plans, effective 22nd September 2025, as notified by the Department of Financial Services. Group insurance policies continue to attract 18% GST.
4. Can I buy term insurance online in 2026?
Yes. Most IRDAI-approved insurers offer fully digital purchase journeys with e-KYC and video-based verification. Bima Sugam, launched in September 2025 under IRDAI’s oversight, also enables policy comparison and purchase across all insurers on a single standardised platform.
5. What happens if I delay buying term insurance by 5 years?
Delaying by 5 years say from 25 to 30 means paying a higher premium for the same coverage for the entire remaining policy term. On a 30-year plan at Rs.1 crore, that difference can amount to Rs. 1.5–2 lakh in additional premiums paid over the life of the policy, with no additional benefit.
