Term Cover Costs More When Delayed: The Price of Procrastination in Financial Planning
Ankit Agrawal
Results-driven financial expert with 7+ years of experience, leading Right Financiers, a renowned insurance and investment firm since 2001. Partnering with India’s top financial providers, we deliver tailored investment, insurance and risk management solutions, empowering clients to achieve long-term objectives with maximum returns and security.
In the world of personal finance, time is the single most valuable currency. It quietly decides whether your money protects, multiplies, or simply slips away. Yet many of us delay essential decisions—especially purchasing term insurance—thinking we will ‘start later.’ However, ‘later’ often turns into ‘never,’ and the cost of waiting can be far greater than a few extra rupees in premium.
Let’s unfold this truth through the journey of Mr. Navneet and Mr. Jagrit, two friends who started their careers together but took very different financial paths.
The Tale of Two Mindsets
At age 28, Mr. Navneet decided to take charge of his future. He purchased a ₹1 crore term insurance plan for ₹10,000 a year and began a ₹5,000 monthly SIP in a balanced mutual fund. His philosophy was simple: ‘Start early, even if small.’
His friend Mr. Jagrit, though equally ambitious, saw things differently. “Why commit now?” he reasoned. “I’m young, fit, and earning well. I’ll buy insurance later when I’m settled and earning more.” He postponed both his term plan and investments, believing he was being “smart” with timing.
Seven years later, at 35, Mr. Jagrit finally decided to get insured. The same ₹1 crore cover now costs him ₹18,000 annually—almost 80 percent higher than what Mr. Navneet had been paying. Meanwhile, Mr. Navneet’s SIP had quietly compounded to over ₹6.5 lakh, giving him a comfortable head start in wealth creation.
One friend acted early and gained control.
The other was delayed and paid the price.
Why Term Cover Costs More When You Wait
Insurance is essentially a contract of risk transfer. The higher your age, the greater the perceived risk to the insurer—and therefore, the higher the premium.
At 25–30, your health profile is typically clean, your medical tests are minimal, and your risk quotient is low. But by 35 or 40, life’s stress, lifestyle habits, or borderline medical issues—like hypertension or high cholesterol—begin to surface. Even mild conditions can result in premium loading or exclusions.
So, each year you delay not only raises your cost but also increases the chance that a future insurer might say “no.” Procrastination does not merely make insurance expensive; it can render it unavailable.
The Hidden Price of Deferred Compounding
What’s often overlooked is that when you postpone buying term cover, you also end up delaying your investments. Many people think, “Let me sort my insurance first, then I’ll start investing.” Ironically, both end up getting delayed.
Compounding—the eighth wonder of finance—rewards early action. It doesn’t care about how much you invest, but how long you stay invested.
Consider this:
- ₹5,000/month for 30 years at 12% return = ₹1.75 crore
- ₹5,000/month for 23 years (a 7-year delay) = ₹84 lakh
The difference is staggering. Waiting costs nearly ₹90 lakh. The lost years of compounding can never be bought back. Every month you defer, your “interest on interest” vanishes into thin air.
Why Not to Start an SIP Without Protection
Another misconception is starting SIPs before securing life cover. Imagine Mr. Jagrit had started investing early but skipped insurance. In the unfortunate event of his untimely demise, his family would receive a small investment corpus but face the absence of long-term security.
Insurance protects; investments grow.
Without both, the financial plan remains incomplete.
A strong financial base always starts with protection, followed by growth and liquidity. Term insurance gives your investments the freedom to flourish without the burden of uncertainty. It ensures your financial goals survive, even if you don’t.
Asset Allocation: Balance Before Brilliance
Many investors chase the best fund or stock but ignore the bigger picture—asset allocation. It is the distribution of wealth across safety, growth, and liquidity. Term insurance forms the bedrock of this structure. Without it, your portfolio may look promising, but it remains fragile.
By locking in affordable term cover early, you secure your foundation. Your SIPs, mutual funds, or equity exposure can then work unhindered, knowing your family’s protection is already assured. It’s not just about earning; it’s about ensuring that earning is preserved.
The Silent Thief Called Procrastination
Years later, Mr. Jagrit went for his policy medicals. His report showed borderline diabetes. The insurer approved his proposal—but at a higher premium and with certain exclusions. Frustrated, he decided to “rethink later.”
By 42, those health indicators worsened. When he reapplied, the insurer declined coverage entirely. What began as a small delay had turned into a permanent loss of insurability.
Meanwhile, Mr. Navneet, now in his late 30s, continued investing calmly. His SIPs grew, his premiums stayed low, and his financial plan ran smoothly. The difference? Not luck—but discipline.
Lessons from Their Journey
- Start early, pay less: Insurance is most affordable when your health and age are on your side.
- Protect before you grow: Security first, growth second—it’s the smart sequence.
- Prioritize asset allocation: Build a balanced portfolio, not a scattered one.
- Respect compounding: Time multiplies wealth; waiting kills it.
- Health equals wealth: Your premium mirrors your lifestyle choices.
Each of these is not merely financial advice; it is a reminder that action today defines freedom tomorrow.
The Reverse Perspective
Most people believe they’ll be more prepared “later.” A better salary, a settled job, fewer expenses—that’s when they’ll start. But that “later” never truly arrives. Life doesn’t wait for ideal conditions.
Here’s the paradox:
- The younger you are, the cheaper the cover.
- The earlier you invest, the greater the wealth.
- The faster you act, the simpler your financial journey becomes.
In reality, waiting reduces options while acting expands them.
Before You Turn the Page…
Take a moment to reflect:
Are you more like Mr. Navneet, who started early and built quietly?
Or like Mr. Jagrit, who kept waiting for the “right time” that never came?
Your financial security isn’t built on income—it’s built on initiative. Every delay, every postponed SIP, every deferred insurance proposal pushes your goals further away.
So, ask yourself—
- What is truly making you delay or defer your term cover?
- Are you waiting for a higher income, better clarity, or just comfort?
- And when the cost finally doubles, will you still call it “saving”?
The truth is simple yet powerful: Term cover costs more when delayed, but peace of mind costs even more when lost.
For any clarifications or queries, please feel free to reach out to us at admin@fintracadvisors.com
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