Do you need term insurance after 50?

Term insurance is a tricky subject when it comes to investing for financial protection. While most types of insurance provide financial coverage for the insured, term insurance acts as a financial cushion, for the family members or dependents, in case of death of the insured.

In simpler terms, it is mostly used to provide a lumpsum amount to the surviving family member(s) or beneficiaries (whoever as such you have nominated) in your absence. Now for most people, it is usually advisable to invest in a term insurance as early as possible. Why?

Because then you’ll have a lower premium to pay, whether you choose monthly, quarterly, annually or a single-time payment. But there can be numerous such situations where you were unable to purchase one early in your life, especially, if you have been the sole earner of the family. In such cases, people often are left with the choice to purchase a term insurance late in their 40s or 50s.

So, the question remains, do you need term insurance after 50?

To answer that, let’s take a look at the various factors that drive the decision.

Factor 1 : Dependent spouse
If you have a spouse that is financially dependent on you and you’re unsure regarding his/her income post your death, then buying a term insurance can be a feasible idea. You can look at it as an investment instead of insurance since in your absence; it will provide the return of whatever you’ll invest in the upcoming years. It can provide financial independence and ensure that they can take care of themselves without being dependent on anybody.

Factor 2 : Dependent children
If you’ve married late in life, then by the time you’re 50, you’re kids probably haven’t become self-dependent yet. As they say, prevention is better than cure. Rather than risk leaving them without any financial protection, it can be wise to invest in a term insurance. In that case, even when you’re not there, you’ll still be able to support their dreams and aspirations.

Factor 3 : Debt
There are often situations where you need a fresh injection of cash and when most traditional sources of finance are exhausted, people turn to their friends and families. Though these kinds of loans can be without interest, they run the risk of hampering one's relationships. In such cases, you’d to ensure that everybody gets their due after you pass away and term insurance provides a great solution for such situations.

Factor 4 : Cost of premium
While term insurances are generally inexpensive, for a person in their 50s, it can be quite expensive. For example, while a term insurance for INR 1 crore for a 30-year-old non-smoker and policy cover up to 60 years of age will require a premium of INR 700-900, the same for a 50-year-old will cost INR 2,300-2,500. If the same policy cover is extended to 100 years of age, the premium will be in excess of INR 4,500.

Dependent on your need and affordability, term insurance can be a great tool. It can be used an insurance or investment for your family’s future and even to pay off your debt. If you can afford the premium, it advisable to get a term insurance, even if you’re 50 years old.