As senior citizens enter the post-retirement phase of their lives, their income streams may be limited, and their health may decline, making them more vulnerable to illnesses and medical emergencies. In such cases, having a term insurance (TI) policy can provide financial security and peace of mind to both the senior citizen and their family members. Read ahead to learn more about term insurance for senior citizens.
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Term Insurance for senior citizens is a life insurance policy that’s specifically designed to meet and cater to the needs of the elderly. It offers coverage for a specific term, which can be chosen based on the senior citizen's age and retirement age. The policy also provides a death benefit to the nominee or beneficiary. This benefit can be used to pay off outstanding debts or expenses, such as funeral costs.
Moreover, it also provides coverage for critical illnesses and medical expenses. This ensures that the policyholder is protected against unforeseen medical expenses. Also, they can maintain their lifestyle, and ensure their financial independence during their retirement years.
Mrs. Sharma, a 68-year-old retired school teacher, had a limited income stream from her pension and savings. She also had a medical condition that required regular medication and follow-up visits to the doctor. To ensure financial security and peace of mind, Mrs. Sharma purchased a TI policy designed specifically for senior citizens. She chose a policy term of 10 years, with a sum assured of Rs. 10 lakhs. The policy also covered critical illnesses and medical expenses.
A few years later, Mrs. Sharma suffered a stroke and was hospitalised. Her medical bills amounted to Rs. 3 lakhs. Fortunately, her TI policy covered medical expenses, ensuring her savings were not depleted.
The policy also provided a death benefit to her nominee, which could be used to pay off any outstanding debts or expenses, such as funeral costs. In this way, Mrs. Sharma ensured her financial security and independence during her retirement years. In addition, she provided peace of mind to her family members.
Term insurance for senior citizens is a vital financial tool that addresses the unique post-retirement financial requirements and beyond. Let's look at some of the critical reasons why term insurance is essential for senior citizens aged over 60 years.
Provides financial support to dependents, even grandchildren who rely on you financially.
Options to choose between regular income, lump sum, or a combination of both to fulfil your family's needs.
Settle debts such as mortgages, loans, or medical bills without causing financial stress to your family.
Knowing your loved ones are financially protected against unexpected events gives you immense peace of mind.
Some of the critical features of senior citizens' term insurance policies:
The age limit for Senior Citizen Term Insurance varies from insurer to insurer, but generally, it ranges between 60 and 80 years of age. These policies typically have a higher age limit than regular Term Insurance policies. It is important to note that the maximum age limit for the policy is the age at which it cannot be renewed.
In the event of the policyholder's demise during the policy term, the insurance company will pay out the sum assured as a death benefit.
The premium is determined as per the buyer's age. Remember, as you get older, the premium amount goes up.
Undergoing a medical test is crucial while buying term insurance for senior citizens. This helps insurers become aware of your existing health conditions, such as diabetes or hypertension, before purchasing insurance.
Term insurance for senior citizens have the option to enhance their coverage with add-on covers. Several options are available, such as terminal illness cover, accidental death benefit, waiver of future premium, return of premium, etc.
Tax benefits on premium paid under Section 80C. Additionally, tax benefit on payout (the death benefit) under Section 10(10d) of the Income Tax Act, 1961.
To qualify for these policies, policyholders must undergo a medical check-up and meet specific health conditions and eligibility criteria. Below are some conditions to keep an eye out for:
Senior citizens are more prone to medical conditions and insurers may require a medical check-up before issuing a Term Insurance policy.
The check-up evaluates the policyholder's health status and determines the premium amount.
Policyholders should not have pre-existing medical conditions such as diabetes, hypertension, or heart-related ailments. If they do, the insurer may reject the application or offer a policy with higher premiums.
Policyholders should not have terminal illness or life-threatening medical conditions.
Insurers may evaluate the policyholder's lifestyle habits such as smoking or drinking, which may affect their health. Smokers may have to pay higher premiums.
Senior Citizen Term Insurance eligibility criteria may vary from insurer to insurer, so it is important to review the policy terms and conditions thoroughly before purchasing.
Choosing the right plan can be a daunting task. Here are some key factors to consider when selecting a Term Insurance policy.
ACKO Life Flexi Term Plan is a Pure and Non-Linked plan with unmatched flexibility, offering all-inclusive coverage for you and a financial safety net for your loved ones. Whether buying a new home or starting a family, adjust your coverage up or down anytime to fit your needs.
Here's what sets this term plan apart:
Adjust your coverage precisely to your needs, ensuring you have the protection you require at every stage of life.
You get the freedom to adjust your policy terms, accommodating changes in your financial goals seamlessly.
Choose from a range of payout options, allowing you to decide how your benefits are distributed to best serve your family's needs.
Benefit from competitive premiums that ensure comprehensive coverage without straining your budget.
Avail tax benefits under section 80C up to ₹45,000 annually while securing your family's future.
Access the convenience of creating a Free Digital Will, simplifying the process of estate planning and ensuring your wishes are carried out efficiently.
We may consider the following 5 key factors while approving your ACKO Life Flexi Term Plan.
Age is crucial in determining your eligibility for ACKO Life Flexi Term Plan. The minimum entry age is 18, and the maximum entry age is 65.
[Note: ACKO Life Flexi Term Plan provides life coverage until age 70, with entry limited to 65 years.]
Individuals engaged in high-risk occupations, including hazardous activities, may affect their eligibility or the premium rates offered.
Habits such as smoking and excessive alcohol consumption directly influence the premium amount, considering the overall risk associated with it.
Income is an indicator of your financial stability, risk assessment, policy duration and more.
It is key to understanding your current health status, risk mitigation (identifying pre-existing medical conditions or potential health risks), and determining accurate premiums.
Ensuring your loved ones are financially secure becomes increasingly important as you age. A 1 crore term insurance might be valuable for offering peace of mind considering the rising costs of living. With a maximum death benefit of 1 crore, this coverage guarantees that should the unanticipated happen; your family will have the financial means required.
Are you curious about your premium? Use a term insurance calculator to estimate the right coverage and premiums based on age, health, and coverage quantity. This will enable you to select a plan that provides the required protection within your means.
Term insurance is an excellent choice for young working professionals seeking financial stability. It’s a temporary, affordable solution that can meet your needs, whether you're looking for coverage or to support your family. On the other hand, permanent life insurance offers long-term coverage and other financial benefits, including investment possibilities and savings plans.
This section showcases frequently asked questions and their answers related to Term Insurance for senior citizens.
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Reviewed by Vaibhav Kumar Kaushik 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
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