Consider if the old car you bought in your 40s has become obsolete or if you require another vehicle for your family’s convenience. Would you put off purchasing a new car? Perhaps not, especially if it is a necessity rather than a luxury.
The same is true for a life insurance policy, particularly one as necessary as a term insurance policy. The tricky part about a term policy is determining its need as it arises. You can quickly identify the need for a new car, home repairs, and other living expenses. However, extra effort is required to recognise the term cover requirement when necessary, especially when you have crossed a certain age.
Do you need term life insurance in your 50s?
Term life insurance provides your dependents with a financial safety net in the event of your untimely demise along with several term insurance tax benefits. These tax benefits come in the form of tax deductions and exemptions, which you may enjoy if you pay taxes under the old regime.
Providing for your family’s future financial needs when you are no longer there can get difficult. Hence, term insurance can be of help.
If any of the following apply to you, you’ll need term insurance in your 50s:
- Your children are financially reliant on you.
- You intend to continue working after reaching retirement age.
- Have a loan that would last long after you retire.
- Would like to leave a legacy for your grandchildren.
If you are in your 50s, you probably have met your children’s financial goals and are preparing for a relaxed retirement. However, it is also possible that you never had term insurance.
Why is it necessary to purchase term insurance early?
The ideal time to purchase a term policy is when you begin earning. You increase your coverage as your responsibilities increase until you retire. However, if you did not purchase life insurance at that time, the second-ideal time is now. In the early stages of your career, your family and dependents are more financially vulnerable. Plus, the premium rises alongside term insurance age limits and remains constant throughout your life.
Only two factors determine eligibility for term insurance coverage:
- You earn money from various sources, including interest, rental, dividends, business, and employment.
- You can be an acting guardian for your dependent parents, spouse, children, or anyone else. A term insurance policy should enable them to live as well as they did when you were there to provide for them.
How much term insurance should you get?
The amount of life insurance in your term insurance policy should be sufficient to meet the following needs of your dependents:
- Costs of living
- Paying off any outstanding loans or mortgages
- Meeting the costs of important future financial objectives
Thus, a term policy should protect your family’s future goals and your lifestyle and liabilities. Typically, 15 to 20 times your current annual income is sufficient to meet your financial obligations.
Importance of term insurance for people over 50 years
There is no occasion to downplay the importance of a good term plan even at a more advanced age. Rather than live with no life insurance coverage, it is better to opt for a term plan and seek sufficient coverage, even if the premium may be high due to a senior age. Some benefits of obtaining life insurance coverage include:
- Financial support for your loved ones – They have the financial means to support their living expenses and pursue their dreams.
- Protection against illnesses – You can opt for a critical illness rider to receive financial compensation against a variety of life-threatening illnesses. Your term insurance tax benefits can also increase with the help of this rider.
- Peace of mind – You can breathe a deeper peace of mind with the knowledge that your family has a financial backup even when something unfortunate happens.
Whether you’re in your 50s or 30s, the basic principles of selection remain the same. Determine your needs and protect your family financially within the term insurance age limit, from mishaps over which you have no control.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.