term insurance for senior citizens

5 Scenarios When You Should Consider Buying Term Insurance For Senior Citizens

Term insurance is purely a tool for financial protection and security of the policyholder’s family and dependents in the event of a fatal consequence of life. If a person holding a term insurance plan dies, the death benefit would be given to the person’s family and dependents, in most cases the nominees mentioned in the policy.

The payout, the sum insured offered, can be utilized as an income source for the family. The payout is either lump sum or in some cases, given out in parts, so that there is a steady cash flow for the family. While it is generally known that term insurance is more beneficial to young insurance seekers, in certain cases, it is advisable to buy term insurance for senior citizens.

In this blog, we’ll tell you all you need to know about term insurance for senior citizens.

  • Term insurance for senior citizens – key features
  • When to buy term insurance for senior citizens? – 5 scenarios
  • Term plans for senior citizens

Term insurance for senior citizens – key features

Premium cost: Term insurance for senior citizens might come at a higher premium compared to policies bought by younger people. For example, if a term plan is bought at the age of 60 years or 70 years, its premium would be much higher than a plan bought by a person at 30 years.

Age limit: Typically, insurance companies have an age bracket of 55 to 65 years as the entry limit for term plans and the maximum age can go up to 85 years. Those who want to purchase term insurance for senior citizens must keep these age factors in mind.

Pre-policy medical tests: Senior citizens who wish to buy term insurance plans may have to undergo pre-policy medical tests. This is so that the insurance company is sure about the insured person’s health condition and avoid risks of any kind.

Riders: Term insurance plans for senior citizens might offer riders of different kinds such as accidental death rider, critical illness rider, disability rider and more. Riders can be purchased as add-ons to term policies. However, senior citizens must understand the exclusions and inclusions and other features of riders before they buy it.

5 scenarios to buy term insurance for senior citizens

1. When senior citizens have dependents (spouse, children, grandchildren)

A term insurance plan for a senior citizen could work as a source of income for the spouse, children or grandchildren upon their passing away. E.g., if you are a male senior citizen and have a wife who is financially dependent, it is advisable to buy a term plan of a sum insured that would see your wife through to the end of her life.

2. For senior citizens without children

Senior couples that do not have children might want to invest in term insurance plans. Senior members who do not have children often have to plan for their post retirement finance much beforehand. They may require maintaining a corpus that is adequate to see them both through to the end of their lives. In such cases, it is highly recommended to buy a term insurance as it can provide financial support to the spouse left behind.

3. For senior citizens who want to leave behind a legacy

In some families, senior citizens may not need to worry about their children or grandchildren financially. However, they may want to leave a legacy for their family. Take for instance Mr. Khanna. He is 85 years old. He has a large family with children and grandchildren who are well settled professionally. Mr Khanna has one wish – to leave behind enough money as legacy and to have a charitable foundation once he dies. That is why, at the age of 60, Mr. Khanna bought a term plan for Rs 1.5 crore. Once he passes away, this amount will be received by his children who would use it to open a charitable foundation, as Mr. Khanna has wished.

4. Senior citizens who have debts and loans

It is possible that some senior citizens have debts and loans to pay off. For e.g., a home loan or a business loan, which they may be repaying in parts, monthly or yearly. Passing away without paying the debt would put the financial burden on their family. In such cases, seniors could buy a term insurance of a sum insured adequate to pay off the debts. When they pass, the payout money can be used to pay off their debts so that their families are not inconvenienced.

5. For peace of mind and confidence

Let’s face a fact – parents would always worry about their children, no matter their age. Some senior citizens too, even at the age of 75 and 80 years would worry about their children. A term insurance plan bought by senior citizens would bring peace of mind and confidence in such senior parents. They would be relaxed because they know that after their passing away, their children would receive financial support.

Term plans for senior citizens

By now, you’ve probably made up your mind for buying a senior citizen term insurance. If you have, well done. You must have taken that decision considering all the benefits to you. Now let’s look at some good term insurance plans for senior citizens available in the market.

Bharti AXA eProtect Term Plan
Maximum age: 65 years
Maturity age: 70 years
Sum insured: 25 lakh to no upper limit

Exide Life My Term Insurance
Maximum age: 65 years
Maturity age: 75 years
Sum insured: up to 25 crore

Future Generali Flexi Online Term Insurance
Maximum age: 55 years
Maturity age: 75 years
Sum insured: no upper limit

Aegon Life iTerm Plan
Maximum age: 65 years
Maturity age: 75 years
Sum insured: no upper limit

To sum it up

Senior citizens have spent their entire lives working hard, saving and investing and planning for their and their family’s future. Term insurance plans provide various options and convenience to senior citizens. However, it is important for senior citizens to be careful when choosing a term insurance plan. We know you wouldn’t mind taking an extra effort for your family and we’re here to help you with that. Get started with your term insurance plan by reaching out to us.

 

FAQs: Term Plan For Senior Citizens

What should be the duration of a term insurance plan for senior citizens?

The tenure of a term insurance plan for senior citizens is as important as the premium and the sum insured. The purpose of a term plan is to provide financial support to your dependents after you have died. Plan the term insurance tenure in such a way that it goes well beyond a time when you have reached all your life goals and retirement goals. For e.g., if a person buys a term plan at the age of 60 years, it is advisable to buy it for a duration of 25 years, up until the age of 85 years, which is the maximum age for term plans.

What’s the best way to choose term plans for senior citizens?

There are certain key factors to consider when buying term plans for senior citizens. Here’s a three-step guide to choosing a plan:
1. Assess the amount that would be needed to support the financial needs of your dependents. The rule of thumb for life insurance coverage is to have a sum insured of at least 10 to 15 times that of the annual income. For e.g., if your annual income is 10 lakh, a sum insured of Rs 1 crore would be advisable.
2. Next, find and compare the plans that you have selected from a pool of options available with different insurance companies. Once you know the amount of sum insured, you will be able to narrow down a few options depending on the maximum coverage offered by insurers. Compare the plans for premium, entry age, maximum age, claim settlement ratio, rating of company, history and performance and other such fundamental factors.
3. Lastly, carefully consider any riders benefits that you may want to add to your policy. Riders come at an additional premium hence it is essential to understand the details and then make a decision.

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