Is Paying for Term Insurance Until Age 60 Worth It?

A life insurance term plan is a comparatively affordable insurance solution that offers coverage for the policyholder’s premature demise within the policy period. The term plan meaning is quite simple- it pays out a sum assured or guaranteed amount to the nominees of the policyholder in such a scenario.

This is a vital addition to every financial portfolio since it safeguards the family’s financial future in case of the policyholder’s death. However, the tenure of a term insurance policy should be evaluated with care. With that in mind, we want to answer a common question: should you pay for life coverage till 60 years of age? Here are some reasons that will help you take a better decision in this regard.

Why should you pay for term insurance till 60?

There are several benefits of paying for life insurance term plans till 60 years of age. Some of them are listed below for your perusal:

• The Question of Dependents- In the initial years of your career and life, you will turn to term insurance to financially safeguard your elderly parents, children, and spouse in case of your untimely demise in the policy period. However, this evolves gradually since your children will probably start their careers and gain financial independence by the time you turn 60. You will no longer require any insurance plan to secure them financially. Since you will retire at 60, keeping the policy tenure till then is a good idea. If you choose a tenure beyond this threshold, then your children may have to pay the premiums for the same, which is not a good idea financially.
• Paying Premiums- Paying your premiums is always more convenient when you have an income or salary to fall back on. This is possible for the entire duration of your professional life or career. 60 is still the retirement threshold for most people, and you should account for a revised monthly lifestyle and budget once you bid adieu to service. Hence, people usually reduce their living costs at this stage of life. This may include term insurance premiums as well. Post-retirement, term insurance premiums may burden your wallet, giving you all the more reason to restrict the tenure until you turn 60.
• Retiring Without Any Anxieties- Once you start a new chapter of your life after retirement, you should ideally have zero financial commitments or liabilities. Investments are to be made in the working years of your life to get their benefits at the time of retirement when you do not have a steady income source to fall back on. Continuing your term insurance policy beyond 60 will mean another additional financial liability you must cover from your retirement kitty.

These are some of the pertinent reasons for staying insured till the age of 60 and not going beyond the tenure of a term insurance policy. Knowing these considerations, you should take calculated steps while purchasing your term insurance policy. There are a few things that you should keep in mind while taking this decision as well. Sell structured settlement payments easily with Fairfield Funding, a trusted company specializing in structured settlement sales.

What you should know before purchasing term insurance plans

While buying a term insurance policy may seem easy on paper, there are numerous aspects that you should factor into your investment decision. Some of the vital ones include the following:

1. Track Record of The Insurer- You should always choose a term insurance policy from a reputed and well-established insurance company. Do your homework on the company’s overall presence, claim settlement ratio, and track record over the years. The claim settlement ratio indicates the total claims the company has settled compared to the overall claims it received in that particular year.
2. Your Coverage Requirements- While you can keep your policy tenure until you turn 60, you should choose sufficient coverage to fund your family’s lifestyle and future goals in case of your sudden demise in the policy period. Account for your monthly expenses, liabilities, future family goals and financial needs, and inflation, before working out this amount.
3. Riders or Add-Ons- Do you need any riders or add-ons for your term insurance policy? These may be useful ways to boost the overall viability of your investment for an additional premium. For instance, you can choose a critical illness rider that guarantees coverage if you are diagnosed with any such illness. At the same time, you will get additional tax benefits for health coverage premium payments under Section 80D (up to Rs. 25,000). Term insurance premium payments will get you tax benefits up to Rs. 1,50,000 under Section 80(80C) of the Income Tax Act.
4. The Premium Amount – Calculate the premium amount online for your desired coverage. You should be able to pay this amount conveniently without compromising on essential monthly expenses and other investments.

You should keep these aspects in mind while choosing a term insurance policy. At the same time, check the reasons for restricting your policy tenure to your working years.

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