Buying term insurance in your 50s? Here is what you should know
Over the past few years, term insurance plans have experienced an upsurge in terms of popularity. This is because term insurance offers low premiums and provides life cover to the policyholder as compared to a full-fledged insurance policy. And this is the main reason behind the ongoing popularity of term plans. In addition, insurance companies have also launched lucrative online term insurance plans to allure young and tech-savvy professionals in this digital-driven era. The internet is flooded with term insurance calculators that will help you to calculate your premium.
Now, the question is whether these term insurance plans are advantageous for people who are close to their retirements or above 50 years. Term life insurance coverage acts as a financial umbrella to your dependents in case of your sudden demise. This means if you no longer take care of your dependents’ future and financial expenditures, term insurance will at least ensure sustenance for their lifestyle.
Upsides of buying term insurance in your 50s
The prime advantage of buying term insurance in your 50s is that it will take care of all your dependents’ financial requirements in case of any unfortunate incident. The following situations should invest in a term plan in your 50s despite the high premium.
- If your children are financially dependent on you
- If you are the only bread earner in the family
- If your wife is dependent on your pension
- If you need to work post-retirement
- If you have taken loans or outstanding debts
Disadvantages of buying term insurance in your 50s
- The prime disadvantage of purchasing a term insurance coverage at 50 could be the age issue.
- It would be an uphill task for you to identify a term plan that will resonate with all your necessities at this age
- The premiums will not be lower for a person in his/her 50s as compared to a younger person applying for a term plan.
- Moreover, a pensioner/retiree with scant financial savings may find it difficult to pay these excessive premium charges.
- These people are more susceptible to diseases or ailments that can impact the premium on account of loading expenses.
- Decreasing sum assured is another disadvantage of purchasing a term plan in your 50s. While a 30 years individual can get a sum assured 10-20 times their present revenue, on the other hand, a 50-year-old person will get solely 5-10 times of the revenue sum insured.
Why you should invest in term insurance plans even if you are in your 50s
1. Outstanding Money Owed
Term insurance plans are ideal for those who haven’t saved sufficient or who are in debt. Because of any ill-fated incident, you may die earlier without repaying your mortgage. In this context, term insurance can only rescue you. To cover the particular mortgage quantity, a term insurance coverage can bring smiles to your family members. In case of your sudden demise, the coverage amount can be utilized to repay loans.
2. Financially Dependent Kids
Life insurance policies are dependent on your duties rather than your age. Nowadays, people won’t get settled within 25 years. Because of demographic changes, these days, individuals postpone marriage and begin a household. When a person is at 50, his/her kids are probably in college or doing higher studies. Thus, they need monetary assistance from their parents. So, it would be a prudent decision if you buy term insurance in the 50s, even at a better premium.
3. Deciding Components
If you purchase term insurance in your 50s, there would be higher premium charges for the term insurance policies. But there is no fixed age to buy term insurance plans. So the sooner you will purchase, you will get more benefits.
Many insurance experts often believe that purchasing term insurance is never related to age, however to the longer-term liabilities—their quantum and term insurance period. The liabilities refer to kids’ necessities (training, increased training, marriage, even medical necessities, etc.), personal home, retirement residing, journey, medical requirements, and many more.
When to buy term insurance?
The right age to buy term insurance is after 18 or when you start earning. With a term insurance cover, only two factors are essential for eligibility:
- You have achieved the majority
- You are earning from any source, such as interest, rental, dividend, business, employment, etc.
- Rest you can have dependent parents, spouse, children, or anyone for whom you are the guardian.
A term insurance cover will help them lead their lives at least as well as they were when you were with them.
Buying Term Cover Early–Why is it necessary?
The moment you start earning, you can purchase term insurance coverage. Then, you can enhance your cover as per your responsibilities until you retire. But if you haven’t purchased a term insurance cover till now, then buy it not for the below-mentioned reasons.
- Depends are more vulnerable at the starting of your career: Your family members and dependents are more financially susceptible in the early days of your career
- Lower premium cost: Depending on your age, the premium will be higher. Thus, by buying term plans at a young age, you can save a chunk of money.
- The increment is easier: You can comfortably increase the cover under the same plan if you buy term insurance plans from renowned insurance companies. This plan permits you to increase your life cover under certain life events, including marriage, childbirth, house purchase.
A term life insurance will not uplift your wealth. Instead, it is a sustainable software that you will protect your house members (in terms of financially) in your absence.