As an earning individual, you may define your financial goals a keeping in mind your families’ requirements. You would want your family to get the best of everything and not have to worry about finances. One of the most common ways to protect your family’s future is by purchasing a term plan. A term plan pays a death benefit to your family in the event of your sudden demise during the policy period. This way, they can use the funds to carry out their expenses.
One should buy term insurance as early as possible, preferably in the 20s or 30s. This not only allows for affordable premiums but also starts protection for your family at an early age.
What if your previous term plan has ended and you’re planning to buy a new term plan in your 50s? You may also be someone who missed out on buying a term plan earlier, but now you see the importance of it but are worried whether it’s a good idea to buy term insurance when you’re in your 50s.
We believe that you can buy insurance even in your 50s since the advantages outweigh the cons. It is better to reap the benefits late rather than never. Having said that, let us look at the pros and cons of buying term insurance in your 50s.
Advantages
- Once you purchase term insurance, you guarantee financial pay-out to your loved ones when you pass away. So, whether it is your spouse or your children, they will receive the death benefit and can use it to sustain themselves. In your 50s, you may still have children who are yet to stand up on their feet. A term plan can keep them financially stable.
- Another advantage of getting a term plan in your 50s is that it can help your family pay off the hefty loans you may leave behind after your demise. In your absence, your family may have to face the burden of loans that you borrowed. A term plan will definitely be a lifesaver in this regard.
- Chances are that your spouse will be well within their retirement years, and they would need funds for their daily expenses. If you pass away before them, they can use the term plan cover to take care of living expenses after retirement.
Disadvantages
- The most significant disadvantage of purchasing a term plan late in the 50s or later is that the premiums could be higher. If a retiree wishes to buy insurance, they may find it difficult to pay their premiums since they wouldn’t have a regular income.
- Another drawback of buying a term plan in the 50s is that the sum assured could be lesser than expected. While a person in their 30s can expect an assured sum that is 10-15 times their annual income, older persons above 50 can only expect about 5-10 times their yearly income.
Final Word
Thus, there are some disadvantages to purchasing term plans late, but the benefits outweigh the cons. So, if you are yet to buy a term plan, compare the different plans and buy online. It is never too late to purchase a term insurance policy.
- A Consumer Education Initiative series by Kotak Life
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Reviewed By :
Prasad Pimple
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
