Term insurance should be an essential part of your financial planning as it helps you to secure the life goals of your loved ones even in your absence. A term plan is a sub-subject of traditional life insurance that aims for the financial well-being of your loved ones.
A term plan can be beneficial at every stage of your life, especially in your 50s. Therefore, let’s understand the need for a term coverage at the age of 50, which is mentioned below in detail:
- Financial independence
After retirement, the flow of your professional income can stop, which is why you might require term coverage with survival benefits to meet your routine needs. Today, many insurance companies can provide you with the usual death benefits along with recent inclusion of survival benefits that can let you lead a comfortable retirement period.
If you survive the term insurance policy, your insurer can provide you with survival benefits after the maturity period. These survival benefits can ensure that you get to meet your routine expenses, such as rent payment, utility bills, groceries, and so on as well as achieve your post-retirement goals without being dependent on your children.
- Income replacement
One of the major advantages of a term plan can be the provision of death benefits. The death benefits are usually provided by your insurer in your absence to your family members. Typically, the amount paid on your death can be tax-free in accordance with Section 80C of the Income Tax Act, 1961.
Typically, the death benefit can act as an income replacement in your absence that can ensure all the financial requirements are met. Moreover, it can make sure that your family continues to maintain its current lifestyle with the right financial backup in your absence.
- Clearance of liabilities
When you are young, you might borrow loans, such as a home loan to buy a new house for your family or student loan to fund your child’s education. To repay the loans, you might make monthly contributions from your income. If anything happens to you during the on-going tenure of repayment, the financial burden might be passed on to your family members.
When you have a term policy under such a scenario, the death benefit can allow your family to clear your past liabilities in your absence. Another way to secure your wife and children from creditors can be to buy term insurance under Married Woman Property (MWP) Act, 1874.
As highlighted above, a term plan can be a basic necessity in your life. With its benefits, such as adequate cover, term insurance tax benefits, and so on, you can safeguard yours and your family’s future. While a term plan can be beneficial for the youth, it can be a crucial addition to your financial plan if you are in your 50s or beyond. With term insurance, you can lead a stress-free period as well as ensure the financial well-being of your loved ones.
Today, many insurance companies can offer term insurance policies on online portals to ensure your convenience. Due to online availability, you can buy an online term plan with ease. An online term plan can be an affordable, convenient, transparent, and flexible form of an insurance product.