Understanding Benefits of Life Insurance for Senior Citizens
Financial independence is essential for everyone, including the senior citizens. Senior life insurance is an excellent investment for senior citizens requiring the necessary financial support for themselves or their family members. Apart from serving as a replacement for income after retirement, the money can be utilized after their death by the family. The sum assured can be used in emergencies, as well as for daily expenses. Seniors can go for term life or whole life insurance policy.
Term Life Insurance
As the name suggests, term life insurance policies can be availed for a specific duration of time. Term insurance is offered to the borrower at an affordable rate of premium. These kind of insurance plans come with a maturity period ranging from 5 to 40 years. Many banks offer these insurance plans for a tenure of up to 60 years, with some even offering it for 80 years. Though term insurance plans don’t include any maturity benefits, they are relatively affordable compared to whole life insurance plans. This insurance plan would be a pure protection plan which means the borrower will get all the death benefits if he/she dies during this tenure. However, if the borrower survives until the duration of the policy, he/she is not eligible for any benefits.
- Term insurance plans can also be renewed after a certain period. The borrower can skip the medical examination as long as he/she provides evidence of his/her good health.
- Term insurance plans can also be exchanged for another life insurance policy which is based on cash-value. In that case, the insured would be paying higher premiums.
- Level term plans can be availed at a fixed sum with stable premiums, for a particular duration.
- These plans can also be availed at lower cover amount and premiums over a period. Banks use these for their risks coverage against loans offered to customers. The EMIs decrease each year in these plans. On the other hand; the borrower can also purchase these policies on an increasing cover and premium at a decided rate. It keeps increasing until the cover reaches almost 1.5 times higher than the original amount.
- Return of Premium term plan is the rarest. In this case, if the borrower survives the period, he/she is offered a return of premium. He/she can receive all the paid premiums excluding any fees or charges.
Major Term Insurance Plans Offered to Senior Citizens
|Name of Plan||Age, Plan Options and Maturity||Sum Offered||Payment of Premium||Special Features|
|LIC e-term||Can be purchased between 18 and 60 years of age. Coverage up to 75 years.||For aggregate category: Rs 25 lakh, for non-smokers: Rs 50 lakh.||Premium paid on yearly basis.|
|Max Guaranteed Life Income Plan||3 Variants – Basic, Life plus Monthly Income, and Life plus Increasing Monthly Income.
Coverage up to 85 years
|Beneficiaries receive the amount after death of the borrower, equal to initial sum.||Regular Pay and Pay till 60.|
|HDFC Life Click 2 Protect||Nine plan options, maximum age is 65 years for all variants. Maximum age maturity for all variants is 75 years. Life Long Protection and 3D Life Long Protection provide lifetime coverage.||Life Stage Protection which helps borrowers to increase their risk coverage during significant life stages.|
|Aegon Life iTerm||4 Plan options. Can be purchased between 18 and 65 years. Maturity age is 80 years.||Minimum sum is Rs 25 akh, Rs. 50000 for Accidental Death Benefit and Rs 5 lakh for Critical Illness Benefit.|
|SBI Life – Poorna Suraksha||Can be purchased between 18 and 65 years. Maximum maturity age is 75 years.||Minimum assured sum is Rs 20 Lakh to be eligible for risk coverage.||Term options range from 10, 15, 20, 25 to 30 years.|
|Reliance Life Super Golden Years||Divided among 8 different plans.||Regular, single and top-up premium payment options.||1/3rd of the fund for Tax free commutation.|
|Kotak Lifetime Income Plan||Minimum age for new purchasers in 45 years while 55 years for plans purchased under Qualifying Recognized Overseas Pension Scheme. Can be chosen among 6 different plans.||Higher annuity rates with higher purchase price. Unlinked and non-participating annuity plan.||Can be availed by customers of superannuation fund.|
|IDBI Termsurance Senior Insurance Plan||Can be availed by people between age of 50 to 85 years.||If death occurs after 2 years of availing policy, beneficiaries get benefit, if premiums have been paid. If death occurs within 2 years, beneficiaries get 125% of total premium.||Senior life insurance Premium of Rs. 100 per month|
Whole Life Insurance
Under Whole Life insurance, the borrower gets the risk coverage for the entire life with no fixed tenure. If the borrower dies, the amount of the purchased insurance gets transferred to the people whom he/she has signed as the beneficiaries. The main difference between whole life and term insurance is that the former includes savings with risk coverage. Moreover, these plans provide consistency of paying off premiums, redemptions on tax, protection for life and cover to beneficiaries after death.