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The best way to give your family the financial cushion even in your absence is to purchase a robust term plan. Read more about why you must buy term plan even after 40.
In India, for most people, the 40s is the most financially productive years of their life. You may be comfortably placed in your profession. You may draw a decent salary to meet your necessities and spare some amount towards savings. Your children may be nearing completion of education and just about to start their career, and the EMIs are taken care of. Life may look settled and peaceful. But, as harsh as it may sound, imagine what happens to your family if you are no longer there? How will they meet their needs?
Let us be honest, while you may do your best to ensure that your family has the best of material comfort, most of these plans revolve around ‘you’ as an individual. But, life can be uncertain. Luckily, it is never too late to secure your family’s financial future. And, the best way to give your family the financial cushion even in your absence is to purchase a robust term plan.
In the event of your untimely demise, your family will receive the death benefit from the insurance company, and they can use the amount to meet their regular expenses and pay off the debts (if any). However, if you have not purchased term insurance because you think being in your 40s is too late, you are only putting the family’s financial position at risk.
So, without any further ado, here are a few reasons why you must buy a term plan even after 40.
Term insurance has the most affordable premium as compared to other life insurance policies available in the market. And, while you may be in your 40s, you may still be healthier than someone who is in their 50s or 60s. So, the earlier you purchase, the better. You can leverage time benefit and get coverage at an affordable premium.
Get insurance against debt
While in your 40s, you may have a few liabilities like a home loan, credit card debt, or a vehicle loan. The repayment may take a significant amount of your income. But, imagine the family does not have any income due to your unfortunate demise. While they are mourning the loss, they may also face the repayment burden.
To avoid such an unfortunate situation befalling your family, it is better to purchase a high-value term policy. The death benefit will act as insurance against the debts; they can use the payout to repay the outstanding amount.
Add-on Cover Benefits
When you buy a term plan, you have the flexibility to choose an additional coverage option, which is known as riders or add-ons. The riders extend the scope of your regular term plan’s coverage and offer protection against specific risks that are not covered under the main policy.
But, remember, when you buy an add-cover, your premium increases. So, you must be prudent with your choice of add-on cover. For example, if you work in a high-risk environment, it makes sense to buy an accidental cover.
Tax-saving is a critical aspect of financial planning. And, whether you are in your 40s or 50s, you would want to maximise your tax-saving, right? When you purchase a term insurance plan, you are eligible to enjoy a host of tax benefits. The premium you pay is tax-deductible up to a maximum limit of Rs.1.5 lakhs in a financial year under Section 80C of the Indian Income Tax Act.
Additionally, the death benefit that your family member may receive is entirely tax-free under Section 10(10D) of the IT Act.
Thus, with so many amazing benefits, there is no reason why you should not purchase a term plan after 40.