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4 Reasons Why You Should Not Stop Term Plan at 65? Research Team | Posted On Thursday, September 05,2019, 01:16 PM

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4 Reasons Why You Should Not Stop Term Plan at 65?



Experts recommend taking a term insurance plan across working life or till the age you have liabilities or big debts i.e. till the age of retirement. While this belief holds true, not many people consider it relevant. Let’s analyse why you need to extend your term insurance plan beyond the age of 65.

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4 Reasons Why You Should Not Stop Term Plan at 65?​

In Case You Don’t Retire at the Age of 65:

Not all people retire at the age of 60. For some people, work becomes part of their life and they extend their working years beyond retirement. If you want to work beyond the normal retirement age or if you are a self-employed person looking to extend your working years and be an active contributor to the family income, then you must not end your term insurance plan at the age of 65. To extend your term insurance plan beyond retirement years, you can choose the limited pay option.

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The regular pay option does not allow you to get insurance coverage beyond the age of 65 as the regular premium payments would be uncertain. So, you can choose the limited pay option where you must complete the premium payment within a limited time and avail coverage for longer duration till the age of 80 years.

The Average Age of Marriage Has Risen:

The average age of marriage has risen and people are likely to get married post-30s. This can be attributed to the nuclear family where people focus on higher education, building a good career and ensuring financial independence before tying the knot. Therefore, the average age of marriage has risen in the past few years and more often than not, people are seen settling down beyond the age of 30.

Consequently, parenthood is also delayed. So, if you marry late and become parents at the age of 35 or 40, you must opt for a term plan with coverage till 70-75 years. Your family will be rid of major liabilities or expenses and you will be able to secure their future.

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The Increased Cost of Healthcare and Treatment:

With an improvement in the medical services, the average life expectancy in India has risen. The cost of availing medical treatment and healthcare is also rising at an increasing pace. Today, people are getting affected by lifestyle diseases; ailments related to environmental change like asthma, lung problems and so on.

So, living in a city as well as taking care of medical expenses may be a bit problematic. Other factors like inflation and rising health problems may lead to higher expenses in the future. The cost of treatment may seem manageable now, but in future, a critical illness or an extended hospitalization would derail your finances. 

Therefore, either you have to curtail your lifestyle expenditures or work beyond your retirement years.

Legacy Planning at Lower Premiums:

Many professionals who work beyond their retirement years are the active contributors to the family income. The loss of such a member may lead to financial instability in the family.

If you want to secure the lives of your dependents and want your family to remain financially stable, then you can opt for term insurance with longer tenure. A sum assured of Rs 1 Crore is a great way to secure your family at an affordable cost and leave a legacy. This is one of the best investment options as the death benefit is fully tax-exempt and you can leave a legacy for your loved ones.

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