Does it make sense to buy term insurance after 50?
There might be a few extreme situations where you have
limited choice and buying a term insurance will be worthwhile.
First things first, term insurance is not for you but for
your family. It is the corpus that your dependents can use after your demise.
Now, a pertinent question arises: Do you actually need term insurance after the
age of 50 years? Well, mostly no, but there might be a few extreme situations
where you have limited choice and buying a term insurance will be worthwhile.
Let us plunge in this scenario based assessment a bit deeper
and see which situations make buying a term plan at the age of 50 beneficial
and where we can simply do away with it. Here we will take broad life
situations and you can take your cues.
Situation 1: You have dependents
If you have kids who are not yet settled (financially
independent) and the savings that you currently have might not be sufficient,
then you should get a term insurance even at the ripe age of 50. These days,
this is a common scenario owing to late marriages and having kids at a late
age. By the time you are 50, your kids are most probably still studying, so it
makes sense to have term insurance, even at a higher premium. However, I
strongly recommend that you should get a term insurance in your 30s not later
than that otherwise you will end up paying higher premium.
Situation 2: You are still financially weak
Though you are officially retired but you still continue to
work owing to ongoing financial responsibilities then you must have a term
insurance. You must protect the ones for whom you are working so hard.
Situation 3: You want your spouse to be self-sufficient
Though you have saved a little bit throughout your life for
your post-retirement financial maintenance but this corpus might not be
sufficient. And, you don’t want your wife to be dependent on anyone else or
lead a frugal life then term insurance is a good investment for you. Also,
according to a research, women usually live 4-5 years longer than their male
partner. Take a stock of your savings and decide wisely.
Situation 4: You still have liabilities
Usually, banks loans stretch till you hit the age of 60 and
this is usually planned at your end. However, what about unplanned personal
loan taken from friends and family taken during distress times? In this
situation your family will need a huge amount to pay off your debts, if
something was to happen to you. Here term insurance can be your saviour.
Above are some of the situations when you might need to buy
term insurance at the age of 50 even if you have to pay higher premiums.
However, in most situations you are kind of financially sorted by the age of
50. You already have a post-retirement corpus built up, while kids are almost
on their path of financial independence. In such a scenario, investing in a
health plan rather than term will make much more sense.
The premium rate of a term plan after the age of 50 is
prohibitively exorbitant. For example, a married man at the age of 50 years has
to spend nearly R26,500 to seek R1 crore life cover from a private insurer of
20 years’ tenure.
However, premium rates for 30-year and 40-year married men
would be around R8,500 and R16,000, respectively.
That’s why it’s always wise to buy a term cover at an early
age. However, you can still opt for one at this age only if extremely necessary
and unavoidable.
ON YOUR TERMS
* If you have kids who are not yet financially independent
and your savings aren’t big enough to quell concerns, you should get a term
insurance even after 50
* Another situation where a term plan could come in handy is
when you are officially retired but continue to work owing to financial
responsibilities
* If you don’t want your wife to be dependent on anyone else
or forced to lead a frugal life, term
insurance could be a good investment for you. Research says that women
usually outlive their male partner by 4-5 years
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