Term Insurance Plans for Senior Citizens – Yes or No?

 

Statistics released by the Union Ministry of Health and Family Welfare show that life expectancy in India has gone up by five years, from 62.3 years for males and 63.9 years for females in 2001-2005 to 67.3 years and 69.6 years, respectively, in 2011-2015. Traditionally, life insurance policies offered cover till the age of 65 years but some term policies in India today offer cover up to the age of 80, with the entry age limit being 50 to 55 years.

Pros and Cons of Term Insurance for Senior Citizens

An insurance policy offers financial security for your family in the event of your demise. A term plan will not only fulfil your family’s financial needs but can also be used to repay loans and other debts. You should buy a policy today if you don’t have one, even if you have crossed the age of 60. A term plan calculator will help you make the right choice, taking into account your current financial condition, liabilities, age and many other factors. Although life insurance companies are less willing to offer life insurance to senior citizens, there are some policies designed specifically for the older age groups. Listed below are some of the pros and cons of buying a term plan for seniors.

Pros:

  1. It is cheaper than other types of life insurance, such as whole life, ULIPs, endowment policy and money-back policies.
  2. It is a pure plan. In other words, the entire premium amount goes towards funding the cover.
  3. Offers cover up to 80 years of age.
  4. You can choose a minimum term of 5 years and maximum term of 30 years (maximum entry age: 55 years).
  5. You can choose how your family receives the sum assured: either as a lump sum payout or as monthly payments. You can also opt for staggered payouts, which is the combination of a certain sum is paid at the time of the policyholder’s death and the remaining being paid as monthly payment.
  6. Various premium payment options include monthly, quarterly, bi-quarterly and annually (depends on the policy terms).
  7. You can buy additional riders to enhance your cover.

Cons:

  1. Higher premiums are charged in case of senior citizens. You can use the term plan premium calculator to determine what premium amount works best for you by changing the cover amount.
  2. It offers only death benefits. It does not provide any survival benefit, although some policies may offer disability benefits.
  3. You are not eligible for any benefits if you surrender the policy. You may get a benefit upon surrendering only if you opt for single premium payment while buying the policy.
  4. Poor health may lead to higher premiums. Use the term plan premium calculator to make the right choice.
Term Insurance Plans for Senior Citizens – Yes or No?

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