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Why Buying a Term Insurance Plan in your 40s is a Great Idea

Why Buying a Term Insurance Plan in your 40s is a Great Idea

Like any other youngster, Raj thought he was invincible and did not think much about buying insurance. One can,t really blame Raj. At the prime of your health, the idea of dealing with unforeseen circumstances is the last thing on people,s minds.

Today, he is in his late 40s and is blessed with a loving family comprising two teenage children and a caring wife. Along with providing for them and saving up for his children's higher education, Raj's responsibilities also include repaying his home loan. In a very recent conversation with his colleague, Raj came to realise the importance of a term insurance plan and how it can cover all his bases in the event of an unfortunate incident.

Changing Life Goals

During your early years, you have good health, fewer responsibilities, almost no dependents and very little debt, if any. There isn't a lot of motivation or immediate need visible to invest in insurance. However, as you age and start shouldering more responsibilities, you understand the importance of insurance. In your late 40s or 50s, you have a better estimation of your insurance needs on the basis of your income, family, lifestyle, etc. You have a more precise estimation of what works for you, what doesn't and how much cover you need. You can then use your experience and wisdom to design a custom Life insurance plan that suits your needs

Shifting Dynamics

With improved healthcare and better lifestyle habits, life expectancy has significantly increased. Not too long ago, one could only get term insurance till the age of 55. Backed with actuarial evidence, term plans today such as the iSelect term plan from Canara HSBC OBC Life Insurance provide a life cover till the age of 80. The premiums do come at a higher cost, but considering the benefits and peace of mind you get with it, the extra charge is not something you should think twice about. This is especially true in Raj's case as he is the sole breadwinner of the family.

Benefits of Limited Pay term Plan

Late Retirement

Nowadays, the retirement age is not rigid. You are not necessarily expected to hang up your boots at 60 as was the case earlier. And even if you do, you could start a small venture or continue working in a consulting role. This means you can earn a decent sum of money even at a later stage in life. Hence, paying your term insurance premiums shouldn't be a problem. So, buying a term policy later in life should not act as a deterrent as the ability to pay premiums also subsequently increases.

Outstanding Debt

Term insurance at any stage in life is a great way to ensure the financial security of your family. More so if you are in your late 40s and have extended home loans, personal loans or any other liability. Passing on debt to your children in the event of untimely death can disrupt their lives. Term insurance will ensure that all your debts are covered, and even after that, your family is left with a sizeable amount to continue to live well as per the lifestyle you provided them. Buying a term plan even later in life will protect your loved ones from life's uncertainties.

Estate Planning

Term insurance is a selfless investment. It's not for you; it's for your loved ones - your spouse, children, grandkids, etc. Term insurance today is used as an active tool for estate planning. With good insurance coverage, you may be able to enhance the amount of wealth you pass on to your heirs. The beneficiary of an insurance policy is indisputable. The insurance may be a tool for your spouse to be self-reliant and not be dependent on the children or you may want to give it out to charity as a good deed.

Ideally, one should invest in a term plan between the ages of 30 to 40, but if you are in Raj's shoes, it's never too late to hop on to the bus. The need and importance of insurance don't fade with age. And since term plans are the cheapest form of life insurance available, term plans such as iSelect are still affordable even with increased premiums. And it allows citizens till the age of 70 to invest in the plan.

The comprehensive protection of iSelect gives your life cover till the age of 80 with inbuilt cover for terminal illness and accidental demise. Additionally, you have the option of covering your spouse too in the policy. Therefore, whatever your age, the iSelect Term Plan is the perfect protection plan for you and your family.

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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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