What is Term Insurance?
Term insurance is a type of life insurance that provides coverage for a particular tenure. In case of policyholder’s demise during the policy tenure, he/she will receive a death benefit and in case of surviving the policy tenure, no benefit will be paid. The death payout can serve as an income replacement for the insured’s family and help the family meet instant and long-term financial requirements.
Why Opt for Term Insurance for Pensioners?
Pensioners, mainly the retired senior citizen opt for term insurance to leave a definite amount for their dependents such as a spouse, children or to cover any debts or to make sure complete coverage of their funeral expenses so that they cannot create financial difficulty for their family after their death. Following are the main reasons why pensioners should opt for term insurance:
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If you are above 50 years of age and have never purchased a term insurance plan in your whole lifetime, then you can buy one now.
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The policy ensures financial benefits for your partner who might be left behind alone to face the financial crunches in case of your absence
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You can save a large amount of money for your children
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Debts, loans can be paid by the amount received from a term insurance policy
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If you do not want to load your family members with spending such as funeral expenses
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To recompense for property legal fees and taxes that the property you left behind
Features of Term Insurance for Pensioners
It is important to be aware of the features and benefits concerning a term policy before making an informed decision. There are several features of term insurance for pensioners that should be taken into consideration before buying the plan from an insurer. The key features for term insurance for pensioners are no different from the basic term insurance plan. Let’s discuss:
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The policy provides death benefits to the nominees/beneficiaries in case of assured’s death
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The policyholder also has the option to buy rider benefits to increase the coverage of your current base term plan. One should consider buying the following riders:
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Waiver of Premium rider
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Critical illness cover
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Return of premium cover
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Accidental death benefit
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The plan protects against various major and minor health conditions if you opt for critical illness cover
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The premium amount paid for the term insurance for pensioners can be claimed for tax deductions u/s 80C of the Income Tax Act, 1961. In addition to this, the death payout received by the beneficiary is free of taxes u/s 10(10D). These tax benefits on term insurance help you save a lot of money.
Best Term Insurance Plans for Pensioners
Most insurers offer term insurance plans only for individuals having age around 25 to 60 years. Following are the top term insurance plans for pensioners that you can select from if you are a pensioner or senior citizen.
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Bharti AXA Life Flexi Term
This term insurance plan protects you and your loved ones against an unforeseen event. It provides you the flexibility to select from three options of payout – Lump sum, monthly income, lump sum, and monthly income.
Key features
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The plan provides maximum coverage up to 75 years, offering you an option of health insurance with the critical illness cover.
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Option for covering critical illness at the age of 75 years. One can either choose the comprehensive cover of 34 illnesses or major illnesses cover of 15 illnesses at the start of the policy.
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Flexible payout options
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Tax Benefits on premium paid and payouts received as per the prevailing laws of the income tax act, 1961.
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IDBI Senior Citizen term insurance
This plan is specifically designed for senior citizens offers extensive coverage and provides financial protection to the family against any unfortunate event.
Key features
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This plan takes care of the requirements of persons above 50 years of age
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The insurance company promises to increase the coverage without making the life assured to go through any medical examination
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The plan offers maximum coverage of up to 5 lacs, which is applicable after the completion of two years of policy from the commencement date
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The plan offers the tax-saving benefit on premiums paid up to the maximum limit of 1.5 lacs under section 80C of the ITA, 1961.
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The death benefit is offered but no maturity benefit under the policy
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Max Life Insurance Online Term Plan Plus
A comprehensive term plan for senior citizens that can be bought online. The plan offers 3 different variants to choose from. Also, it provides financial coverage to the insured’s family against any eventuality.
Key Features
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Flexibility to choose from three different cover options: Basic life cover, life cover plus monthly income, and life cover plus increasing monthly income
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These variant options provide coverage to the life assured up to the age of 85 years
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The plan provides 2 different premium payment options which are: Regular pay or pay till 60 years of age
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Rider benefits are available under the plan to supplement the plan coverage.
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SBI Life Poorna Suraksha Plan
It is a non-linked term plan for senior citizens that comes with an (inbuilt) coverage for critical illness. The plan offers extensive coverage to the insured’s family in case of any uncertainty.
Key Features
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The plan provides increasing critical illness benefit
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If the critical illness is diagnosed, a premium waiver benefit is provided under the policy
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The policy’s premium amount is fixed all over the plan tenure
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Maximum maturity is 75 years
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Tax benefits on premium paid u/s 80C of the ITA up to the maximum limit of 1.5 lacs
Wrapping It Up!
A term insurance plan is one of the simple and cost-effective life insurance products available in the insurance market. It can be purchased at any of your life stages, as its prime objective is to provide financial protection to your family.
If you are a pensioner looking for a term plan, consider parameters like maximum entry age offered by the insurance company, the premium rates, the term coverage provided, riders, exclusions, etc. before purchasing the policy. Buying term insurance for Pensioners is the smart way to protect your family from financial difficulties in case of your absence.
