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5 ways to get financially fit in your 40s

5 ways to get financially fit in your 40s

The 40s can be a milestone in an individual’s life. Your career path is charted, your income is stable, and there are several opportunities for growth. On the personal front too, you are settled with a family and possibly kids. However, all these responsibilities bring a number of challenges along with them.

Financial planning in 40s is crucial in order to ensure that you achieve your goals as well as those of your family in the long term. Here are a few pointers to keep in mind so that you can make the most of this life stage by taking steps in the direction of financial security for the well being of you and your loved ones:

  • Spend within your limit: You might have a greater disposable income than you did in your 20s, but that is no reason to splurge without any limit. It could lead you into debt and burden you with loans you find difficult to repay later. One of the most important tips to manage finances in your 40s is to set a budget for your expenses and spend on what is needed. Any additional savings can be channelized towards investments to help grow your money. If one fails to do this, their extravagant lifestyle could diminish savings and leave little for their nest egg.
  • Invest more in equity: Increasing your allocation to assets which promise growth in the next few years should be a part of financial planning in 40s. This means that your savings should be invested in instruments which promise higher returns than the current rate of inflation to give you an edge. Equities should be a part of your financial portfolio in order to fund your children’s education, your retirement and any other goals. Being a liquid asset, it can help you meet your goals as well as fund your needs during an emergency.
  • Zeroing upon important goals: What do you save more for? Getting your son or daughter through a reputed college in India or abroad for their further studies or pulling out all the stops for their grand Indian wedding? Are you investing enough on a monthly or yearly basis to help you achieve that amount when the time nears for your child to enter college or get married? Prioritising future goals and assessing your preparedness for them in line with your savings, investment and current economic conditions are a few tips to manage finances in your 40s.
  • Be prepared for retirement: 68% people are of the belief that their children will support them after retirement, while 51% feel that their savings will be exhausted once they retire. A majority of 58% are of the opinion that they might not be able to live comfortably once they retire from the workforce. Increasing healthcare costs are a point of worry for a whopping 64%. These statistics reveal that it is important to make retirement planning a part of your portfolio at a young age. Focusing on your life needs when you would be retired, gives your money time to grow and appreciate as well as benefit from the power of compounding by the time you are ready for the next phase in your life.
  • Buying a term plan: Did you know that term insurance provides complete financial security to your family in your absence and is the cheapest and simplest form of insurance available in the market? A term plan has one of the most affordable premium rates among all life insurance policies, all while offering policyholders the benefits of a high sum assured. You can also enhance your protective cover by purchasing riders, such as Accidental Death Benefit, Accidental Disability Benefit or Critical Illness Riders. Your current lifestyle, income, expenses, financial responsibilities should be guiding factors when choosing the right term plan.

These 5 rules can be stepping stones to a financially secure future. Take the first step by opting for Canara HSBC Oriental Bank of Commerce’s iSelect Star Term Plan. The plan comes with flexible premium payment options, numerous payout options and a range of riders for enhanced coverage, including but not limited to, Accidental Death Benefits and Child Support Riders. It also comes with the option to cover your spouse and increase or decrease coverage in subsequent years. Consider the iSelect Star Term Plan and you’ll be well on your way to financial security.

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Frequently Asked Questions (FAQs) for Term Insurance Plans

A person can only purchase a term insurance plan till the age of 65 years, and they can choose the risk coverage for up to 99 years of age. One can easily buy the best online term plan between the age of 18 to 65 years.

This being a term insurance plan doesn't offer any payout after maturity or expiration date

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 65 years of age. This is a term plan with return of premium option – that means all the premiums paid throughout the tenure will be paid back to you if you outlive the policy.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly when you buy the best term plan in India.

If your key purpose is to give your Family financial protection, go for the best term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan. iSelect Star is a term plan with return of premium option. All the term insurance premium will be paid back to you, if you outlive the policy term.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, the best term insurance plan pays a part of the sum insured to treat your disease.

Term life insurance plan riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance plan riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term insurance policy remains active until the expiration date.
  • Income Rider: This rider in a term insurance plan ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term insurance plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while Buying the Best Term Insurance Plan?

  1. 1. Are you buying a term plan with return of premium?
  2. 2. Amount of premium you have to pay based on your age, habits, education, and monthly income
  3. 3. The total number of benefits covered in the term insurance plan. Do they include benefits that you care about the most?
  4. 4. How to save money on tax if you pay for the term life insurance plan?
  5. 5. Do they offer regular income options?
  6. 6. Can you change the coverage and premium in the future?
  7. 7. Does the claim consider valid if death occurs outside India?
  8. 8. Which kind of death is not covered by a term insurance plan?
  9. 9. Can NRIs take a term insurance plan? If yes, what are the conditions?
  10. 10. Does the term insurance plan have a cash value if you decide to cancel the term insurance policy?
  11. 11. Under what circumstances can a term insurance plan be cancelled?
  12. 12. Can I pay the premiums online or make electronic payments?
  13. 13. What will happen to the term life insurance plan if the life assured starts smoking after purchasing the policy?
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