23 Jan 2019
A term insurance policy is a pure protection plan that provides a risk cover against death on the life of the policyholder. Thus, if the policyholder succumbs to an untimely death during the policy tenure, a death benefit will be paid out to the nominee. This payout can serve as an income replacement for the policyholder’s family and help the family meet both immediate and long-term financial needs.
While term insurance policies in the past were exclusively marketed towards the younger demographic, life insurance providers, today, also offer term insurance plans to senior citizens. Many of these term insurance policies can be purchased by individuals in their 50s and 60s. Further, these policies also provide coverage up to 75 or even 80 years of age. Read on to know more about why you should purchase a term insurance plan if you are a senior citizen and some of the most popular senior citizen life insurance plans that are currently offered by insurance providers.
Why Should Senior Citizens Purchase Term Insurance Plans?
- Term insurance plans provide a payout if the policyholder passes away during the policy tenure. This payout can help your nominee clear any debts or loans that they might have.
- Term insurance policies can help you provide financial security to your dependents.
- Certain term insurance policies come with a number of benefit payout options. Thus, you can opt for a particular payout option as per the needs of your nominee.
- You can leave a significant inheritance for your dependents.
- The payout provided by term insurance policies can be used by your nominees to pay for immediate expenses and long-term expenses.
- If you are still employed after the age of 60 and are contributing to the family’s monthly income, you should purchase a term insurance policy since the payout will serve as an income replacement for your family in case of an unfortunate eventuality.
Features of Term Insurance Plans for Senior Citizens
Age Range: Life insurance plans can usually be purchased by individuals over the age of 18 years. The maximum age at entry for a term insurance plan will usually vary from insurer to insurer and plan to plan. However, for most term insurance policies, the maximum age at entry will range between 55 years and 65 years. The maximum maturity age, i.e., the age up to which one can avail the coverage provided by the policy, will also vary based on the plan and the insurer but can go up to 85 years.
Benefits Payable: Since term insurance policies are purely protection-oriented, these policies will provide a death benefit to the nominee in the event of the policyholder’s death. However, since these plans don’t acquire a cash value, no benefit will be paid in the form of survival or maturity benefits. The exception to this is if you purchase a TROP (Term Return of Premium) plan, wherein all the premiums paid during the policy tenure will be returned to the nominee at maturity of the policy.
Pricing: While term insurance policies have a reputation for being extremely affordable, the truth is that the premiums payable are linked to one’s age at entry. Thus, if you are purchasing a term insurance policy later on in your life, you will probably have to pay a higher premium.
Medical Test: Policy buyers may be required to undergo a pre-policy medical screening before purchasing a policy so the insurance provider can ascertain that the individual doesn’t suffer from any pre-existing medical conditions. Even if you are not required to undergo a medical test, you will be required to provide a declaration of good health to the insurer. Make sure to not conceal any facts about your health at the time of purchasing the insurance policy.
Riders: Life insurance firms offer riders to policy buyers to help them enhance their policy coverage. While the number and types of riders offered will vary from insurer to insurer, you can choose to purchase riders as per your requirement.
Top 5 Term Insurance Plans for Senior Citizens
Listed below are certain insurance policies that provide life coverage to senior citizens. These policies are offered by life insurance providers with the highest claim settlement ratios for FY16-17.
LIC’s e-Term Plan: The e-Term Plan is an online term insurance plan that can be purchased by individuals between the ages of 18 years and 60 years. This policy will provide coverage to the policyholder up to 75 years of age. Individuals who wish to purchase this policy must opt for a policy tenure between 10 years and 35 years. The minimum sum assured that can be opted for by the aggregate category is Rs.25 lakh, whereas the minimum sum assured that can be opted for by the non-smoker category is Rs.50 lakh. Premiums towards this policy have to be paid on an annual basis.
Max Life Insurance Online Term Plan Plus: The Online Term Plan Plus from Max Life Insurance comes in three variants – Basic Life Cover, Life Cover + Monthly Income, and Life Cover + Increasing Monthly Income. All three variants of this policy provide coverage to the life assured up to 85 years of age. This plan comes with two premium payment options – Regular Pay and ‘Pay till 60’ Option. In the event of the policyholder’s death, the nominee will receive a lump sum payout which will be equal to the full sum assured.
HDFC Life Click 2 Protect 3D Plus Plan: The Click2 Protect 3D Plus Plan from HDFC Life is an online term insurance policy that comes with 9 plan options. This policy also comes with a Life Stage Protection feature, thereby enabling policyholders to increase their coverage amount during key milestones in their lives. The maximum age at entry for this policy is 65 years. The maximum age at maturity for all plan variants except the Life Long Protection Option and the 3D Life Long Protection Option is 75 years. The Life Long Protection Option and 3D Life Long Protection Option provide coverage for the policyholder’s entire lifetime.
Aegon Life iTerm Plus Plan: The Aegon Life iTerm Plus Plan is a cost-effective policy that provides comprehensive protection to the life assured. This policy also comes with 4 plan options, from which the policyholder can choose a particular option as per his/her needs. This policy can be purchased by individuals between 18 years and 65 years of age. The maximum maturity age for this policy is 80 years. Prospective policy buyers must opt for a policy term between 5 years and 62 years. The minimum death sum assured payable as per this plan is Rs.25 lakh. Similarly, the minimum Accidental Death Benefit and Critical Illness Benefit payable is Rs.50,000 and Rs.5 lakh, respectively.
SBI Life – Poorna Suraksha Plan: The Poorna Suraksha Plan from SBI Life Insurance is a pure term insurance policy that is designed to provide financial security to the policy buyer’s dependents against unfortunate eventualities. This policy can be purchased by individuals between 18 years of age and 65 years of age. The maximum maturity age for this policy is 75 years. Individuals who are purchasing this policy must opt for a minimum sum assured of Rs.20 lakh to be eligible to avail the policy’s coverage. The maximum sum assured that can be chosen is Rs.2.5 lakh. The policy term options are 10 years, 15 years, 20 years, 25 years, and 30 years.
Term insurance policies are a smart choice for individuals looking to provide financial security to their family, regardless of their age at the time of purchasing the plan. That being said, always make sure to compare at least a few different plans and opt for the policy that offers the best benefits at an affordable cost.