Buying term insurance at a young age helps protect against risk. By the time you retire, most of your liabilities are met and your children are also well established in life. However, buying a term life plan after retirement must be your last option, unless you have financial liabilities or a huge loan to pay off. This article tells why you need term insurance after retirement.
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See Also: How to Buy the Right Term Insurance Plan
Age: Avail term insurance when you get the first job. The maximum entry age varies across insurers. Some insurers offer life insurance coverage up to the age of 75 years. The maximum age up to which a person can avail term insurance, varies from 60 to 65 years. So, in case a senior citizen avails a term plan, then the sum assured and the tenure depends on the available plan and the insurer.
Benefits Payable: As the term insurance policies are pure risk plans, they offer the death benefit to the nominee in the event of death of the insured, within the policy tenure. However, these plans do not have any survival benefit and subsequently, no cash value. The only exception is when you avail a term insurance plan with return of premium, where all premiums paid are returned.
Pricing: Term Life insurance is the most affordable life insurance plan. So, the premium rate depends on the age at which you avail the plan. If a senior citizen wishes to avail term insurance plan, then the insurer would charge a hefty premium.
Medical Test: You must go through medical tests, before availing the term life policy. A medical test assures the insurer that you are healthy, and do not suffer from any pre-existing diseases.
If you suffer from pre-existing diseases, there is a high chance of a claim. When a senior citizen avails a term plan, he/she must provide a declaration of good health or go through medical tests. The buyer must not conceal any health-related issues from the insurance company at the time of availing the term insurance policy.
After your retirement, you have minimum liabilities. So, at this age availing term insurance does not make sense, unless you have financial obligations. Listed below are some of the scenarios in which a senior citizen can avail a term plan:
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