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Should you decrease your cover as you grow older?

Remember how I introduced term insurance as a product to replace you financially? Yeah, we need to revisit that. See, as you grow older, your dependents may no longer be as dependent on you as they once were. Your kids grow up. Your savings corpus increase in value. You will have enough money to cushion against any headwind. More importantly, your financial obligations will no longer look insurmountable.

Think about it. If you’re a young lady with a home loan, you have to worry about paying your EMI each month. And in the off chance, you pass away, the burden shifts — to your spouse or even worse, your kids. So obviously you need better protection. You need a higher cover. But once you are through with the EMIs and your kids start working, maybe you won’t need the same level of protection. Maybe replacing you financially won’t be that big of a challenge. So some insurance companies offer you the option of decreasing your cover as you grow older. And that obviously means you will have also have to pay lower premiums as your cover diminishes in value.

While this might be a feature some people would seek, it’s very hard to predict future financial obligations. So if you are opting for this rider, make sure you are doubly sure you won’t need a massive cover as you grow older.

If you need help shortlisting a good term policy or if you want to talk about your cover amount, text us on Whatsapp.

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