I am 32. A friend associated with the insurance industry that rates of term insurance are going to fall in future told me. In this light, should I go for a short-term policy, or a long-term policy, like 20 plus years?
Deepti Shankar, Chennai
Your friend may be right in his contention that in view of the increasing numbers of policyholders, the rates of term insurance may fall in future. However, it is always beneficial to take a longer-term life insurance plan because term plans get more expensive as you advance in age. Moreover, with age, the requirement of medical tests set in too, which increases the possibility of hiking your premium above the standard rates. Though some insurers offer to renew term policies without a medical test, they do not guarantee doing away with the medical tests completely. Therefore, although it is just possible that the rates of term policies may drop in future, but because you will also gain in age, the rate of premium may still go up for you.