Life Insurance for Senior Citizens

Why Do Senior Citizens Need Life Insurance?

There are several reasons why senior citizens feel the need for life insurance plans. However, one of the main reasons is that these plans can replace their income to support them and their loved ones financially. Because after getting retired, the money inflow stops suddenly. 

Also, in case of a senior citizen’s death, the children and spouse may suffer greatly because of a lack of money. So, insurance plans are essential to avoid such financial troubles as they act as a medium for savings and an income source at the last of the policy term. Moreover, the payment received from these life insurance plans can be used to pay off debts such as medical expenditures, outstanding loans, etc. 

What are the Top 5 Reasons Senior Citizens Should Buy a Life Insurance?

Here is a list of all the reasons why you, as a senior citizen, should consider buying life insurance for senior citizens:

• These policies provide financial freedom by providing a steady flow of income even after retirement

• With life insurance, you can secure a large amount as an inheritance for your kids

• Your family can use the payout from the life insurance policy to pay off any pending or ongoing debts, medical expenses, education expenses, etc., as per the nominee's or dependent family member's needs.

• In your absence, the life insurance policy will provide financial benefits to your spouse, who might be unable to care for themselves.

• The funds from the policy may be used to pay the applicable taxes on property or any legal fees your family may face.

Benefits of Life Insurance for Senior Citizens

Life insurance policies for senior citizens in India offer several benefits to maximise overall coverage and secure financial backup. The benefits are as follows:

• Fulfill lifelong goals
  With the increase in overall life expectancies, many individuals live longer, up to 80 to 90 years. A life insurance policy will make sure you are financially independent for your entire life and have enough money to take care of any dreams or new hobbies.

• Financial Independence
  Buying a life insurance policy for senior citizens ensures the ultimate financial security. This means it helps in reducing financial stress in the future.

• Tax Benefits
  If you have bought a life insurance policy for a senior citizen, you can avail of tax benefits on the income you will receive from the policy under the Income Tax Act of 1961.

• Payoff Outstanding Debts
  In case of your untimely death, your dependents will receive the sum assured. This way, your family won't have to bear the financial burden of any outstanding debts.

• Covers Funeral and other costs
  Many insurance providers offer funeral/death expenses, medical expenses, financial aid to pay off other unpaid debts, and a basic life insurance plan. In rare cases, one can pay off personal loans using the policy cover.

• Income Replacement
  In the case of post-retirement, a life insurance policy can provide the benefit of regular income.

Characteristics of Life Insurance For Senior Citizens

Let us see some of the characteristics of life insurance for senior citizens

• Senior citizen life insurance offers a variety of payout options like a lump sum, lump sum with income, or regular income to your needs.

• The entry age for such plans differs for different insurance companies.

• You can receive the annuity monthly, quarterly, bi-annual, or annual to replace your regular income post-retirement.

• These plans offer tax benefits under Section 80CCC of the Income Tax Act of 1961.

Different Types of Life Insurance For Senior Citizens in India

The different types of life insurance for senior citizens in India are as follows:

1. Term Life Insurance

   Term insurance plans for senior citizens provide coverage for a specific time. Under this plan, the coverage ends with the policy term. These plans payout the death benefit in case of the policyholder’s untimely death during the policy term. These pure risk protection plans are the most affordable life insurance for senior citizens in India. With term insurance for senior citizens, you can choose the desired policy term, life cover, premium payment frequency, and enhance the coverage by adding riders to the base plan and also increase the sum assured at different life stages. Before buying term insurance for senior citizens, you should always consider comparing life insurance quotes and choose the plan with the most affordable premiums and coverage. 

2. Whole Life Insurance 

   This comprehensive life insurance covers the policyholder's family for their whole life, i.e., till 99 or 100 years of age. The death benefit is paid to the policy nominee on the death of the policyholder. This life insurance for senior citizens comes with an insurance and investment component and has premiums slightly higher than term insurance plans because of the benefit of their savings. These plans offer premium payment options, tax-saving benefits, cash value components, and lifelong protection. Since these plans have a cash value component, you can access loans and withdrawals facility under this policy. 

3. Retirement/Pension Plans

   Retirement or pension plans allow policyholders to save for their retirement and ensure a steady flow of income after the end of their monthly salary. You can choose an immediate annuity plan that offers a pension or annuities immediately after purchasing the plan, which allows senior citizens to live a financially independent life even after retirement. The income these plans provide can help the policyholder live a comfortable life and ensure the spouse receives the income in case of the policyholder’s death.

Best Life Insurance Policy for Senior Citizens in India 2023

Let us take a look at some of the best life insurance for senior citizens available in India in the year 2023:

Note: You can also use a life insurance premium calculator to compute the premium amount you have to pay for your desired life cover.

How To Buy a Life Insurance For Senior Citizens India?

You can follow the steps below to buy suitable life insurance for senior citizens as per your needs.

• Step 1: Go to Policybazaar’s Life Insurance for Senior Citizens page

• Step 2: Enter your basic details like name, gender, phone number, and email address

• Step 3: Click on ‘View Plans’ to browse the available plans

• Step 4: Fill in accurate information regarding your smoking habits, occupation type, annual income, and educational background

• Step 5: Select the most suitable senior citizen life insurance plan and proceed to pay

Points to Remember About the Senior Citizen Life Insurance Premium Rates

• The premium rates increase with the increase in age. Therefore it is suggested to buy life insurance for senior citizens as early as possible to enjoy the benefits for a longer tenure.

• You can get senior citizens term insurance at affordable premium rates by maintaining a healthy lifestyle and carefully comparing the plan online before purchasing the one most suitable for your needs.

• The premium rates are also dependent on family history and medical background. You may be asked to take a medical exam before buying the plan.

Final Word

Many insurance companies provide life insurance for senior citizens, which are plans for people who are 50 years old or above. Few insurers offer customized plans to senior citizens who are 65 years or above. The maturity age of a life insurance policy for senior citizens with various companies can go up to 99/100 years. This insurance policy aspect allows many individuals to buy a senior citizen's life insurance even if they have never purchased a plan.

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