I am 40. Does it make sense for me to buy a term insurance plan now?

Wise people have always propagated that age is just a number. Alas, some people don’t think along the same line and start to feel old as soon as they hit 40. They believe that their lives have no purpose because they are growing old. They don’t know that now is the best time in their lives to focus on themselves. Generally, it is seen that most people in their forties earn enough money to live comfortably for the rest of their lives. On the other hand, their children are also nearing the end of their higher education, which ensures the responsibility of parents with respect to their education is about to be over. 

Overall, it’s a terrific time to explore your interests in your forties. However, remember that your family is still your responsibility, and their health and well-being should be your top priority. Considering how life can be unpredictable, it is a prudent idea to provide them with financial protection while you can so that they do not have to alter their lifestyle in case you, unfortunately, pass away. 

That’s why acquiring a term insurance plans in your 40s is crucial. You are required to pay monthly premiums to ensure that your family members receive a death benefit if the breadwinner passes away. If you are stopping yourself from buying a term insurance plan, thinking you don’t need one, considering you are 40, this article is for you. 

Reasons to Purchase Term Insurance in Your 40s

There are various reasons why purchasing term insurance plans in your 40s is a good idea:

Helps you to realize your family’s dreams: As the family’s breadwinner, you are required to park funds for them to realize their goals. Have you ever thought about what will happen to their dreams if you, unfortunately, pass away? Their dreams may be destroyed, which is the last thing you want to happen. A term insurance plan can be extremely beneficial in this situation, and ensuring the proceeds from the insurance plan are in the form of a death benefit can help them. 

Protects your family from the loan you have taken: You may have taken out loans or incurred credit card expenses. In your absence, it may be difficult for your family to meet those financial obligations. A term policy provides a death benefit that can be used to pay off those debts.

Can avail of Income tax benefit: In addition to providing financial security to the family in your absence, purchasing a term insurance plans can also help you save tax under Section 80C of the Income Tax Act.

Easy to purchase: Purchasing term insurance no longer entails a time-consuming process. Make sure to evaluate the features, and compare premium rates of different insurance policies using the term insurance plan calculator before making a final decision.

Can increase the coverage with the help of riders: Insurance companies also provide the option to the policyholder to add riders to their existing term insurance policy for additional security to cover cases such as disability, critical sickness, or accident coverage.

Here are a few things you should know before buying term insurance in your 40s:

1. It is not too late to purchase term insurance: It is true that the earlier you acquire insurance, the lower the premiums you will pay. As people get older, their chance of death increases considerably, resulting in higher premium rates. However, term insurance plans are the most cost-effective type of life insurance. So, even if you choose a term plan in your forties, your policy’s rates are likely to remain less if compared with other investment decisions of yours. 

2. Keep yourself healthy: To take advantage of the lowest possible term insurance premiums, you must maintain your physical health by being health conscious and avoiding excessive drinking and smoking. This allows you to obtain term insurance in your 40s at a low cost while still providing financial security for your loved ones. 

3. You must be sufficiently covered against debt: Whether it’s your loan, car/two-wheeler loan, or credit card debt, it’s critical that your term insurance death benefit covers the repayment of these responsibilities. Loan interest rates and existing credit card debt may become a burden on your family when you are not around. You should evaluate the cost of paying off these liabilities and then choose a term plan using the term insurance plan calculator. 

4. You might want to choose decreasing coverage: If you have a large number of liabilities in your forties that are projected to decline over time, you might choose to go for decreasing coverage. As you pay off debt, you no longer require a large sum assured to cover debt obligations in your absence. With declining term insurance, your coverage diminishes (typically by a set amount) each year. This, in turn, makes term insurance more affordable for you and your family. 

5. Use term insurance as a savings tool: As you approach your 60s, retirement planning becomes a big issue. Your investment requirements shift from short-term to long-term as you plan for retirement. In this situation, your term insurance may also be useful. While term insurance is commonly thought of as a pure insurance instrument, modern term plans incorporate savings components into the existing structure to assist users in maximising their benefits. With the ‘return of premiums’ provision, at maturity of your term insurance policy, if you have not made any claims against the policy, the premiums paid towards the policy are returned to you in full. Thus, term insurance can also serve as a savings tool for those in their forties, allowing them to save for a comfortable retirement. 

So, we are saying,

One is likely to be well established in their career by the time one reaches their forties. Therefore, if for some reason you couldn’t own a term insurance policy in your 20s, your 40s is the best time. While purchasing term insurance is best done in your 20s or 30s, the 40s are also an excellent time to guarantee your family’s future. Just make sure you use a term insurance plan calculator to compare the premiums from different insurance companies to select the best. Upon your unfortunate death, a term insurance plan pays out death benefits to help your family maintain their quality of life, accomplish future ambitions, and pay off liabilities.