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Term Insurance for Senior Citizens

It is often advised to buy term insurance as early as possible in life, ideally in your 20s or 30s. But that does not mean that you can't buy it after that age has passed. Even senior citizens who are aged above 60 can buy term life insurance to financially protect their loved one's future in case of their untimely demise. Do not miss out on insuring your family's life, assuming that you cannot buy or are not eligible to purchase term insurance as a senior citizen. ...Read More

To delay is to regret

You may not always be around to take care of your family. And that’s when a term plan ensures your family is well protected.

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Term Insurance for Senior Citizens
Term Insurance

Why is Term Insurance Important for Senior Citizens?

Why is Term Insurance Important for Senior Citizens?
October 30, 2024

Table of Content

 

Term insurance is a suitable insurance option for not just youngsters but also senior citizens. Once you become a senior citizen, the fear of leaving your loved one's financial future in jeopardy can give you sleepless nights. That is why buying term insurance is important for senior citizens, too.

  • Money Protection

    • After the age of 60 years, even if you have retired, it is crucial to financially secure your family's future with adequate cover that acts as money protection. This amount would ensure that your family's daily expenses, debt obligations, and investments can go on and that the set life goals are achieved in a timely manner, such as in the case of a child's marriage.

  • Flexible Payment Choices

    • Another key aspect to consider when thinking about the importance of term insurance for senior citizens is the flexibility in payment options. The cover that your nominees will get can either be as a regular income, as a lump sum, or even a combination of both.

  • Whole Life Cover

    • Term insurance policies for senior citizens also come with the option of whole life cover, which takes away the stress of purchasing new insurance or renewing the current one after a certain age, like 80 years. Nowadays, many term insurance plans offer coverage up to the age of 100 years.

  • Replacing Lost Income

    • Another reason why term insurance is important for senior citizens is that if they still have an income source and dependents, the policy's cover amount can act as replacement income for the nominees if they, unfortunately, die.

Features of Term Life Insurance for Senior Citizens

1. Age Limit:

Most life insurers in India have an age bracket of 18 to 65 years for buying term life insurance, with the upper limit extending to 80 to 85 years in some cases. This shows that it is possible to buy term insurance for senior citizens, too, if they wish to secure their family's financial future in the unfortunate event of their death.

2. Death Benefit:

As term insurance plans are like pure protection policies, the insurer would pay the sum assured to nominees in the event of your, i.e. the senior citizen's demise. This payout at the time of your unfortunate demise is done directly to your nominees.

3. Premium Payable:

For any term insurance plan, the policy remains effective only till maturity, provided you keep paying the premiums timely. Although term plans have affordable premiums, especially for younger age groups, the premium can usually go higher for senior citizens. You can use an online term insurance premium calculator to get an estimate of their expected premium amount.

4. Medical Test:

Term insurance for senior citizens would mostly require you to go through a medical test. This is done to make sure any pre-existing medical condition, such as diabetes, is known to the insurance company before the policy purchase. Your premium amount is affected by such medical conditions.

5. Extra Coverage Options Available:

Term insurance plans also sometimes offer extra coverage through add-on riders like accidental death benefits, terminal illness cover, waiver of future premiums, etc. Note that such add-on covers are not compulsory but can be taken to enhance your overall coverage.

Benefits of Term Insurance Plan for Senior Citizens

  • Safety for Your Family

    • Senior citizens who buy term insurance can have a peaceful mind, knowing that they have provided financial safety to their family in case of their unfortunate demise. The assured sum shall be given to your nominees in such scenarios, which would prevent your family's financial future from getting jeopardized.

  • Financial Independence

    • In the case of TROP (term plan with return of premium), the maturity amount’s payout can act as post-retirement income, which thus provides financial independence and stability to senior citizens.

  • Achieve Your Money Goals

    • Term insurance for senior citizens can help your nominees (loved ones/family) in achieving money goals, such as a child's higher education fees or wedding costs, through the payout amount.

  • Clear Your Debts and Obligations

    • The term insurance’s cover would greatly help your nominees in handling existing debt obligations such as loan EMIs, credit card debt, etc. In the absence of a term plan, your family can be overburdened with all such liabilities.

  • Create a Legacy

    • Buying term insurance for senior citizens can help you create a legacy for your future generations in case of your unfortunate demise. Policies such as whole life insurance can ensure the passing of financial benefit to your family upon your demise, even if it is at the age of 90 or 100.

  • Improving Life Insurance Coverage

    • Add-on riders like critical illness, disability, waiver of premium, etc., can help senior citizens enhance the overall coverage of their term insurance plan.

  • Tax Saving Benefits

    • Keep in mind that the premium you pay towards term life insurance is eligible to be claimed as an income tax deduction of up to Rs 1.5 lakh per year under Section 80C.

How to Choose the Best Term Insurance Plans for Seniors?

After understanding the importance and benefits of term insurance plans for senior citizens, it is equally crucial to know how to choose the right policy:

1. Pick the Right Coverage

Firstly, know how much coverage you need to adequately insure your family's financial future. Senior citizens need to factor in the future financial requirements of their spouse and, children, and other dependents, if any. From the monthly groceries and existing EMIs to the inflation rate, a lot of factors are considered when picking the suitable cover amount, which is usually advisable to be at least 10 times your annual income.

2. Think About Extra Coverage Options

When finalizing any term insurance for senior citizens, factor in the options to enhance your overall coverage through add-on riders like term illness payout, return of premium, etc.

Riders Benefits Available With Term Insurance for Senior Citizens

Given that having add-on riders can enhance your overall term insurance coverage, here’s a list of rider benefits often offered by insurers:

  • Accidental Death Coverage

    • This add-on rider provides an added amount on top of your policy's base sum upon the unfortunate accidental death of the senior citizen during the policy's term.

  • Benefits for Terminal Illness

    • If you get diagnosed with a terminal illness, the insurance company may either start paying a part of your cover or even pay the entire cover amount to assist you in taking care of the high medical bills.

  • Total Permanent Disability from Accidents

    • This rider ensures that an additional amount gets paid to you in case the senior citizen gets affected by an accidental total permanent disability during the insurance policy’s term.

  • Critical Illness Benefits

    • If the policyholder gets diagnosed with a critical illness like cancer, it gets covered under the plan of term insurance for senior citizens. In this case, the insurer would pay the added sum assured to assist you in covering the illness’ treatment costs.

  • Premium Waiver Benefits

    • Another add-on rider often offered by insurers is the waiver of all future premiums in case the senior citizen gets diagnosed with a critical illness or accidental permanent disability.

Important Points to Keep in Mind When Buying Term Insurance for Seniors

1. Assess Your Needs

Be clear as to why you need the term insurance. Do you want financial safety for your family, or just leave them some money for inheritance? Knowing the aim would help you choose the right term insurance.

2. Review Coverage Choices

Ensure you do enough research and then compare various types of term insurance policies being offered by insurers. Understand the benefits, features, and drawbacks of each policy.

3. Consider Affordability

Do not miss out on assessing your affordability when selecting an insurer and a policy. Go ahead with a term insurance plan whose premium you are comfortable paying without stressing your finances too much.

4. Check for Medical Needs

Some term insurance plans for senior citizens require them to go through a medical examination to assess their pre-existing diseases, if any. They would also need to provide a medical history and disclose any medical condition to the insurer. Remember that some insurers may not take any such examination, but they may also have higher premiums.

5. Look Into Insurance Companies

Ensure you opt for a reputed insurer, especially if they specialize in term insurance for senior citizens. The insurer's claim settlement ratio, financial stability, range of products, etc, are all important factors to consider.

6. Check the Policy Rules and Details

Do not miss out on the minute details. Carefully review all the term insurance policy documents, terms and conditions. Aspects like premium payment terms, add-on riders, coverage limitations, and exclusions should not be ignored.

7. Compare Quotes

Try to get quotes from various insurers on the basis of premium cost, policy features, reputation, coverage amount, etc. Amongst them, you can compare and choose the suitable one.

Why You Should Buy Term Insurance Without Delay

Benefits and features such as affordable premiums, flexible payouts, add-on riders, and income tax benefits make term insurance for senior citizens a great option. If you are a senior citizen planning to secure your family’s future financially, buying a term insurance plan without any further delay can be useful. Not only will your loved ones’ financial future be secured, but you too can live with a peaceful mind, knowing your family will not be financially burdened in your unfortunate absence.

Summary

Suppose you have not bought term insurance yet, even after becoming a senior citizen, and note that it's never too late. You can still buy term insurance from a reputable insurer whose policy features, premiums, add-on riders, payout options, etc, suit your financial situation and goals. With a term insurance plan, your family's financial future will be secured in case of your unfortunate demise.

FAQs on Term Insurance for Senior Citizens

Q: What is the maximum age to purchase term insurance for senior citizens?

Many life insurers in India have an age bracket of 18 to 65 years for buying term life insurance, with the upper limit extending to 80 to 85 years in some cases. 

Q: Can a senior citizen purchase a term insurance plan?

Yes. Many life insurers allow senior citizens aged 60-85 years to buy term insurance to secure their family's financial future.

Q: What are some key factors that can impact the term insurance premium for senior citizens?

Your current age and medical tests can impact your premium amount to a great extent. Having pre-existing medical conditions like diabetes can lead to higher premium costs, as the risk of securing your life can be higher for insurers.

Q: Can senior citizens cancel their Term Insurance policy?

Yes, senior citizens can cancel their term life insurance at any time. They need to submit a written request to the insurance company regarding the same.

The insured are allowed a 30-day free look period to review their currently purchased policy's terms and conditions and cancel the policy if they find it unacceptable.

Q: Is there a waiting period for Senior Citizen Term Insurance policies?

The waiting period varies across different insurers and policies. The waiting period for senior citizens can go up to 1-3 years, especially for pre-existing medical conditions.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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