While setting financial objectives and goals throughout your career, purchasing a term life insurance is among one of those plans that is ideally executed at a young age. That is simply because; buying a term policy can become inconvenient and costlier as you get older. Generally, the premiums will not be as low for a person purchasing the policy in their 50s as compared to a person opting for a policy in their 20s or 30s. However, taking a term policy late in life can still act as a safeguard substitute of payments towards the policyholder’s dependents in the event of his/her demise.
Is buying a term policy above the age of 50 the right decision?
The sole purpose of taking a term policy is to ensure that your dependents are not left helpless by your demise. But taking life insurance coverage after crossing the age of 50 is relatively unusual. However, there are certain term policies specifically for those who fall in that category and these plans have great advantages as well. Nevertheless, there are still questions over whether these term policies are wholly beneficial to those who are nearing the retirement age. So, here’s a look at the benefits of taking a term policy even after you turn 50:
- Financial security of your dependents/loved ones: By taking a life insurance policy after the age of 50, he/she may be able to leave behind a sum of money at the time of his/her passing. If the policyholder has kids who are not financially settled, those funds might help them survive without their primary dependence. Here, the term policy insurance can play a huge role in securing the future of the policyholder’s loved ones.
- Alternative to income from pension:In most cases with government workers, the income received from the pension for spouse or children may come to a halt after the policyholder’s demise. Hence, the ‘death benefit’ from an over 50s life cover can be a suitable replacement for regular income for the family. Also, a term policy with survival benefit options allows the policyholder to enjoy its benefits even during his/her lifetime, by providing monthly income on attaining 60 years of age.
- To pay off liabilities and debts: Term policies can also be taken by those who have outstanding debts that need to be paid off. It can be considered as an excellent option for those above 50 if they owe money to others or are still paying off their loans. Following the policyholder’s passing, the insurance from the term can pay for the money owed by him/her.
- Continuing work after retirement: One more situation where term insurance benefits might come in handy is when the policyholder is officially retired but continues working owing to his/her financial responsibilities. A term policy can provide income for the family even after his/her passing and the plan can preferably be taken if the person is the sole breadwinner of the family.
Even though most term insurance policies provide protection to the close ones of the policyholder at his/her untimely departure, insurance companies classify deaths into various categories. Based on whether the deaths are covered or not covered is then decided but in certain cases, the insurance company may decline to pay depending on the life insurance term plan. If your family is unable to receive the sum assured in your absence, buying a term plan will be considered meaningless. Hence, it is vital to understand and go through the fine print of your policy before purchasing it.
What is the term insurance age limit?
When purchasing a term insurance policy, it is also crucial to know the term insurance age limit as the investment plan has a minimum and maximum eligibility age. A term policy can be purchased from anywhere in the range of 18 to 65 years of age. It is also possible to opt for coverage until the age of 99.