Indians are severely underinsured, especially when it comes to life insurance policies. Only 3.2 percent of Indians have some form of life insurance, which is not a promising figure, especially when a global pandemic is wreaking havoc on all aspects of life. It has left many families vulnerable to financial hardships in case the primary breadwinner meets an untimely demise. The pandemic has only exacerbated the situation.
But there is a silver lining. Historically, these low numbers can be attributed to a lack of awareness, but now more and more people are becoming aware. With the advent of online avenues, it has never been easier to learn about life insurance or to buy life insurance.
One of the most relevant insurance products today is term insurance, but they are mostly being opted for by young professionals. While they are also an excellent product for someone who has crossed 50. Today, in our bid to raise awareness, we will discuss why it is still a good idea to buy term insurance in your 50s and what are the challenges that can arise.
Let’s begin.
WHAT IS TERM INSURANCE?
Term insurance is a kind of life insurance plan that provides life cover to the policyholder for a fixed period. If the policyholder happens to meet an untimely demise during the policy term, a death benefit is paid to the nominees. There are annual premiums that can also be paid in smaller amounts at smaller intervals. In a pure term plan, there are no maturity benefits. It is there in place only for contingencies; it’s like investing in a fire extinguisher.
Some benefits of term insurance are as follows:
- Low Premiums: Term plans are very affordable, especially if you get them at an early age.
- High Cover: The sum assured is very high, especially when you consider the low premiums.
- Tax Benefits: Premiums paid up to an amount of INR 1.5 lacs are tax-free, as per section 80C of the Income Tax Act of 1961. The sum assured is also tax-free under section 10(10D).
- Riders: Companies like Edelweiss Tokio Life Insurance offer well thought and valuable riders as add-ons to enhance the scope of your term insurance policy.
As you might have guessed by this brief overview, term insurance is an ideal plan for individuals who are looking to secure the financial future of their families. Let us see how it can be beneficial for someone who has crossed 50 years of age.
3 Reasons to Get a Term Insurance in Your 50s
Even at 50, term insurance promises to safeguard your family against financial distress. As more and more people work longer in their lives, it becomes necessary to have a replacement for that income in case they are no longer around. Let’s see why:
- Dependent Children: With a shift in lifestyles, a more career-oriented person might have children late in life, resulting in them still being the breadwinner and the chief financial pillar of the family when they cross 50. These places a responsibility to secure the financial future in case the worst happens, as the children have not yet become financially independent. This realisation can trigger the need for a term plan.
- Dependent Spouse: In the case of a non-working spouse, it becomes the responsibility of the earning spouse to ensure financial support for them in their absence. A term plan can take care of this.
- Mitigating the Burden of Liabilities: As you grow old and take on more responsibilities, your liabilities increase. They can be home loans, auto loans, etc. To make sure that this burden does not fall on the family in case you happen to pass away before complete repayment of these loans, you need to have a term insurance plan in place.
Challenges
Buying a term plan in your 50s is not without its challenges, as it is not the ideal time to buy the plan. Still, it is the best option at your disposal. The things that can pose an issue are as follows:
- Age: Term Plans are the cheapest when you are in your 20s and 30s, and their prices go up with yearly inflation and age. So, your advanced age will lead to higher premiums and, in some cases, can make it challenging to get a term plan at all.
- Health: Similarly, your health becomes a liability as you age, especially for insurance providers who might view you as a risk due to higher chances of chronic illnesses. But this is subjective and might not be an issue if you have stayed healthy.
Conclusion
Buying a term insurance plan in your 50s is a wise choice if you do not have a term plan in place. Although it can pose challenges, it is still worth the premium as it ensures financial security for your family.
The Zindagi Plus term plan offered by Edelweiss Tokio Life Insurance is an ideal choice for you as it is comprehensive in its scope and offers many rider benefits. The maximum entry age for the plan is 65 years, for the ‘life cover with level sum assured and regular pay’ option. You can visit their website to learn more!
