To Buy: 1800-258-5899 (9 am to 6 pm)

|

customerservice@canarahsbclife.in

|

Locate Branch

Login

Should you Buy a Term Insurance Plan in your 50s?

dateKnowledge Centre Team dateApril 08, 2021 views121 Views
Should you Buy a Term Insurance Plan in your 50s?

Imagine if the old car you bought in your 40s is outdated, or you need another car for the convenience of your family. Would you hesitate and avoid buying a new car? Possibly not, especially when it is a need rather than a luxury.

The same happens with a life insurance plan, especially something as important as a term insurance plan. However, the challenging part with term insurance is identifying the need for it as and when it arises.

You can very easily identify the need for a new car, home repair and other such expenses in life. But you need some extra effort to recognise the term cover need and when exactly do you need it.

Do You Need a Term Life Cover in Your 50s?

Term life insurance coverage helps you provide your dependents with a financial umbrella, in the case of your early demise. Meaning, if you can no longer take care of their future and financial needs, term cover will at least ensure sustenance for their lifestyle.

So, you will need a term insurance cover in your 50s if any of the following are true for you:

#1 Children are financially dependent on you

#2 You expect to continue working post-retirement age

#3 Have a loan that will continue well past your retirement

#4 Want to leave a legacy for your grandchildren

If you are in your 50s right now, most likely you have fulfilled almost every financial goal of your children and now preparing for a relaxed retirement. However, it is also likely that you never had a term insurance cover.

Buying Term Cover Early – Why is it Necessary?

Ideally, the best time to buy a term cover is when you start earning. After this, you only increase your cover as your responsibilities grow until you retire. But in case you did not buy the life cover then, the second-best time is now, and here are the reasons:

  • Your family and dependents are more financially vulnerable in the early days of your career
  • Lower premium cost: The premium rises based on your age and remains the same throughout your lifetime. Thus, buying at a young age saves a lot of money for you.
  • The increment is Easier: If you buy term insurance plans like iSelect Star from Canara HSBC Oriental Bank of Commerce Life Insurance, you can increase the cover under the same plan. This plan allows you to increase your life cover upon certain life events, like marriage, childbirth, house purchase. Such increment has a lower cost in term of both money and effort.

What is the Correct Age to Buy Term Insurance Cover?

The correct age to buy a term cover is any time after you have reached the age of 18 or when you start earning. With term insurance cover only two factors are important for eligibility:

  • You have attained the majority
  • You have an income from any source, such as interest, rental, dividend, business, employment, etc.

Rest you can have dependent parents, spouse, children or anyone else for whom you are an acting guardian. A term insurance cover should help any of them live out their lives at least as well as they were when you were there to provide for them.

How Much Term Cover Should You Buy?

The amount of life cover in your term insurance plan should be large enough to provide for the following needs of your dependents:

  • Living and kitchen costs
  • Paying-off any ongoing loan or mortgage
  • Meeting the cost of the important future financial goals

Thus, the term insurance cover should not only safeguard your family’s future goals but also lifestyle and liabilities. Usually, 15 to 20 times your current annual income is enough to take care of all these financial needs.

However, there is more to meeting these needs than is visible in these three needs. Consider the following:

  • Loans are the Easiest

    Paying-off loans and mortgage only require paperwork and effort. It is a one-time financial exercise, i.e., you do not need to estimate anything, once you pay it off, it is over.

  • Goals need Investing

    Using the money received from the term insurance policy to invest for long-term goals could be a tricky maze to cross. This is especially difficult for novice investors, and they would want to play it safe. However, very few safe investments offer tax benefits and liquidity.

  • The Toughest part - Managing Lifestyle

    Lifestyle expenses even if minimalistic need regular income. While you are alive your family can easily budget their expenses based on the monthly input you provide.

    However, this decision is difficult when they face a large pool of finite money available for the entirety of time. Withdraw too much and they risk emptying the pool too soon, withdraw too little and their lifestyle suffers.

    Thus, the best thing is if you can decide this part beforehand.

So, whether you are buying a term cover in your 50s or 30s, the basic principles of selection remain the same. Identify your need and protect your family financially from mishaps you have no control upon.

Related Articles

Browse by Categories

Get a Call Back

Do you want us to call back Please fill the form below

Annual Income (In Lacs)

Our Products

TERM Insurance PLAN

TERM Insurance PLAN

Whole life cover option available

Increase your life cover with changing life stages

Return of premium & in-built protection options

Multiple premium payment options

Avail tax benefits on premiums paid as per tax laws

ULIP PLAN

Unit Linked Insurance Plan

8 funds and 4 portfolio strategies to invest

Loyalty additions and wealth booster

Return of Mortality Charge is available on Maturity under all three cover Options

Flexibility of switching between the fund options to take benefits of market movements or change in risk preference

Pos Easy Bima Plan

Top Benefits

Hassle free

Get double life cover in case of accidental death

Choice of flexible premium payment and policy term

Avail tax benefit on premium paid

Frequently Asked Questions (FAQs) for Term Insurance

This being a term 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 70 years of age.

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.

If your key purpose is to give your Family financial protection, go for the term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan.

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, a term plan pays a part of the sum insured to treat your disease.

Term insurance 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 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 policy remains active until the expiration date.
  • Income Rider: The rider 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 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 a Term Insurance?

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