You may think that senior citizens do not have any use of a term insurance policy. However, the evidence is stacked against this. We all understand the feeling of abandonment elderly people have to go through, especially once their children move out of their homes or start a family. This might make the elderly feel dependent. It is one of the main reasons why many insurers have come up with policies specially catering to the needs of the elderly.Read more
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Irrespective of age, everyone needs a term insurance policy. It provides financial protection to your family if something unfortunate happens to you. Not only this, but it also provides for medical bills and other requirements. However, there are specific reasons why senior citizens need term plans.
Let us have a look at some of them:
It gives them the feeling of independence and self-reliance.
It is a wise investment for some in their late years who do not want to risk their life savings.
It allows senior citizens to protect a dependent spouse or child from a financial crisis when they pass away.
If an elderly person is still receiving a monthly income, term insurance is a good way to invest this money safely and gather good returns.
Insurance companies offer multiple plans nowadays due to a rise in the demand for term insurance for senior citizens in India. However, one plan stands out amongst all. Canara HSBC eSmart Term Plan offers coverage to senior citizens of 70 years of age and above. The plan offers a high life cover wherein customers can also add multiple riders to enhance their overall coverage.
A few features of this plan are:
Anyone between the ages of 18 – 70 years can purchase this plan.
The maturity age is 75 years.
The policy term may be between 5 – 40 years.
The minimum sum assured is Rs.25,00,000.
There is no limit on the maximum sum assured that might be accumulated.
There are two plans to choose from, A and B. In plan A, the sum assured is Rs 1 crore. In plan B, the sum assured is Rs 1 crore, and the customer will also accumulate an accidental death benefit sum assured.
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Features of term insurance slightly differ when it comes to senior citizens. The features applicable to senior citizens are mentioned below:
Though most insurance policies are limited to the age of 65 years for purchase, numerous insurers have come up with plans in the recent past that can be purchased even at the age of 75 years.
Usually, insurances that are purchased in later years have a shorter maturity period as compared to those that are purchased earlier.
Term insurance plans are pure protection plans. Thus, only the death benefit is available to the nominee at the time of maturity. However, if the customer has purchased an additional rider, then the nominee stands to gain the added benefits.
The rates of premiums are usually higher than what would have been if the policy had been purchased when the customer was younger.
Every insurer has a criterion for fitness that all customers must pass. In all likelihood, you will have to undergo a few tests to determine your health condition. The number of tests you would have to undergo solely depends on your insurer.
You can determine if your policy funds will be distributed among your nominees as a lump sum or in instalments over a period.
As is the case with other term insurance plans, you are allowed to pay premiums on a monthly, yearly, quarterly, or half-yearly basis.
Some insurers offer discounts to senior citizens who are willing to accept a higher sum assured.
It is now not necessary to visit the branch office of an insurer to purchase a term insurance policy. Instead, most insurers have online websites where you can make an online payment using your credit card to purchase a term insurance policy.
Some of the common factors affecting term insurance premium rates for senior citizens are:
If you purchase term insurance at the age of 70 years, you will have to pay a higher premium. This is because an increase in age automatically means a decrease in life expectancy.
Though most people are retired by this age, you might be charged a higher premium if you are involved in a risky occupation like mining, commercial pilot, navy, and similar.
A 70-year-old female will get a slightly lower premium rate than a 70-year-old male. It is because women are awarded a lower premium rate than men for many factors like greater life expectancy.
If you are currently suffering from a pre-existing medical condition like heart disease, diabetes, and high blood pressure, you will most probably have to pay a higher premium.
Persons who display a healthier lifestyle are automatically given a reduction in premium rates. If you are at optimum weight and do not have any severe medical complications, you will stand to gain a discount on your premium rates.
Smokers and those who consume alcohol or are addicted to any other substance will automatically receive a higher premium rate because such habits increase health risks.
You can follow these tips before buying a term plan for a 70-year old male in India:
Choose a coverage that suits your needs and lifestyle. For example, a plan where the sum assured is more than your yearly income is considered good.
Purchasing term insurance for a long period makes no sense for senior citizens. Instead, choose a policy with a shorter time frame.
Since term insurance plans do not provide any funds other than the death benefit, you can enhance your policy by opting for appropriate riders. However, it's not a compulsion. You can add riders only if you feel the need for them.
Always keep the claim settlement ratio of your insurer in mind. This will avoid any hassles at the time of claiming the policy.
Age should not bar you from purchasing a term plan even in your senior years. Though the premiums may be on the higher side, securing your family’s financial needs in your absence can not be overlooked.
If you consider all mentioned factors in the article, you can choose an adequate plan. However, you must conduct proper research about your insurance company and their plans, including knowing the claim-settlement ratio. It will help your family during policy claims.
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