Term Insurance for Senior Citizens

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: Should You Buy Term Insurance For Senior Citizens?

Term Insurance for Senior Citizens

Why Should Senior Citizens Avail Term Insurance Plans?

• Term insurance policies pay a lump sum amount to the nominees in case of demise of the insured within the policy tenure. The payout can help nominees enjoy financial security and pay off dues.
• Term insurance policies also come with several payment options like the default lump sum payout, income replacement payment option and so on. You can effectively and efficiently plan and secure finances of your dependents with term insurance.
• You will be able to leave a significant amount for your dependents and help them lead a comfortable life.
• People who are employed after 60 and still contribute to the family and have liabilities must avail term insurance.

See Also: How to Buy the Right Term Insurance Plan

Features of Term Life Plans for Senior Citizens:

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.

See Also: What Are The Best Insurance Plans For Parents?

Scenarios in Which Senior Citizen Must Avail Term Insurance:

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:

• In case you married late and have dependent kids. Term Life insurance can help secure their future in your absence.
• You can avail term insurance to secure the financial future of your spouse and help her lead a financially independent life.
• You can avail term life plan in case you are still working after retirement and have liabilities and actively contribute to your family income.
• If you have any debts or loans that you are paying even after retirement, then you can avail term life plan. The death benefit can be used to pay off all liabilities.

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