Help your seniors feel protected with senior insurance policies!
Life insurance for senior citizens is extremely important to make them feel protected. The elderly population in India is rising with improved life expectancy rate. Everybody wants to be cared for in their old age. Senior citizens tend to feel very lonely and helpless as they are not in a position to help themselves, either financially or physically. So, one of the best ways to take care of them and make them feel financially and mentally secure is to buy insurance policies for them.
Senior citizen policies are devised to offer protection to your near and dear ones; they also provide complete peace of mind to you by ensuring that your aging parents will be taken care of in the future. By offering your seniors a good insurance policy, you take the responsibility of saving your loved ones from running into financial trouble. Even in your absence, these policies will take care of your seniors’ financial requirements.
Why Do Seniors Need Insurance?
There are a number of reasons why seniors feel the need of insurance policies. However, the main reason is that these policies can serve as a replacement for their income to support them and their family. Because, after retirement, the inflow of money suddenly stops. Sometimes, upon the death of a senior member, the spouse and children may suffer a lot due to the lack of money. So, to avoid such financial tension, insurance policies are very important as they act as a channel for savings and an income source at the end of the policy term. Also, cash received from these policies can be used to pay off any other existing debts like outstanding loans, medical expenses, etc._1
Different Types of Senior Citizen Insurance Plans:
There are different types of life insurance plans to help seniors avoid financial stress. All these plans for senior citizens in India normally fall under two major categories namely “Whole Life Insurance Plan” and “Term Life Insurance Plan”. Apart from these two major plans, there is another type called “Guaranteed Life Insurance Plan” for senior citizens.
Term Life Insurance:
Term insurance plans for seniors provide coverage for a specific period of time. When the policy period ends, coverage does too. Death benefits are paid out in the event of death during the policy period. They are pure protection plans and since they do not have any additional frills, term life policies are generally more affordable and flexible than whole life plans. You can choose the tenure, sum assured, and payment frequency based on your needs. Some term policies come with renewal facilities to renew your policy for a new period when the term is over. This extends coverage even with a progression in age.
When it comes to buying term insurance plans for senior citizens, it is always advisable to spend some time and consider the quotes offered by the insurance company and compare them to choose the most appropriate plan based on affordability and coverage. Also, you need to keep in mind that some companies tend to adjust premiums for seniors after every few years which should be kept in mind when assessing costs.
Whole Life Insurance:
This is a comprehensive form of insurance which provides insurance coverage to the policyholder for his/ her entire life i.e. there is no fixed policy period. Upon the death of the contract holder, the insurance payout gets transferred to the designated nominees/ beneficiaries. Age is no bar when it comes to buying whole life insurance policies. These policies come with a savings component, along with the original insurance coverage. That is why whole life plans are priced higher than term insurance plans which don’t have a savings component. Whole life policies come with many other attractive features, for e.g., consistent premium payments over the whole tenure of your policy, tax redemptions, cash value growth, and permanent protection. With guaranteed cash value offered by these plans, you can access your cash through loans and other withdrawal options.
Retirement plans for senior citizens
All throughout the employment period of an individual, he/she would have been saving for retirement. But there would always be concerns about outliving this retirement corpus. Life insurance companies offer immediate annuity plans specifically suited for senior citizens, so that they can live without having to worry about finances in their sunset years. The income provided by these plans will continue throughout the life of the customer, and in his/her absence, will be offered to the spouse.
Some of the key features of a senior citizen retirement plan are:
- Such plans ensure financial independence after retirement through regular payouts.
- The plans offer an extensive range of variants (income option) under these plans that can be chosen based on the retirement needs of the customer.
- There is a wide range of annuity payout frequencies, i.e., monthly, quarterly, semi-annually, and annually that can be selected by the customer.
- Since these plans are configured specifically for senior citizens, the entry age under these plans usually start from 45-55 years.
- Such plans offer tax benefits under section 80CCC of the Income Tax Act, 1961.
- Some of the most popular senior citizens retirement plans available in India are Kotak Lifetime Income Plan and Reliance Life Super Golden Years Term 10 Senior Citizen Plan.
Benefits of Senior Citizen Life Insurance Policies:
Senior citizens insurance policies come with many added benefits apart from providing financial security. The benefits of insuring seniors’ lives include:
- Seniors feel honored and don’t feel lonely and neglected in their old age, which is indeed very important to keep them healthy, both physically and mentally.
- It reduces your future financial worries. Because the insurance policy will take care of your elderly loved ones by paying for their various needs.
- Buying these policies can also help policyholders avail income tax redemption as per the Income Tax Act, 1961.
- Senior citizen policies will take care seniors even in your absence without passing the burden to extended family members.
- These policies can provide a source of funds for funeral and death expenses, medical expenses, and other unpaid debts such as mortgage payments, credit card bills, and personal loans.
- They also provide social security benefits in the form of an income stream (annuity) post-retirement.
- These policies help senior citizens create a corpus of funds for their next of kin.
How To Choose The Right Senior Citizen Life Insurance Plan:
Choosing the right insurance plan for the elderly is a difficult task given the number of choices and plans offered by various insurance providers. These plans are easily accessible, but how you compare the different policies and zero-in on the right plan to suit needs and budget can be tedious.
It is always important to compare the various policies offered by different companies and find out the pros and cons of each and every policy, keeping in mind that the seniors often face different and unique challenges. Some seniors might have problems finding the right policy because of their age and some others may not be covered under good policies because of poor health. So, after assessing and understanding the various needs and challenges faced by seniors along with the advantages and disadvantages of the senior citizen life insurance plans, you need to compare costs and benefits to arrive at the right choice.
Life Insurance Plans for Senior Citizens:
There are a number of insurance plans designed especially for senior citizens. Mentioned below are few of them:
- Reliance Life Super Golden Years Term 10 Senior Citizen Plan
- Kotak Lifetime Income Plan
- Max Life Guaranteed Lifetime Income Plan
Key Features of Reliance Life Super Golden Years Term 10 Senior Citizen Plan:
- It is a systematic investment plan to secure your future.
- You can choose among eight different investment funds.
- You can switch between funds.
- It is a flexible unit-linked pension plan.
- Regular, single and top-up premium payment options are available.
- Get tax free commutation up to one third of fund value.
Key Features of Kotak Lifetime Income Plan:
- This is a non-linked, non-participating immediate annuity plan that provides you a steady income throughout life.
- The customer can choose from 6 annuity options, based on his/her insurance needs.
- Higher annuity rates are offered when the purchase price is higher.
- The plan can be taken by individual customers and members of a superannuation fund. This includes the existing pension plan customers of the insurer who are looking to utilise the pension plan proceeds.
- An annuitant who has received an immediate annuity can buy an additional annuity to get a higher annuity payout.
- The minimum entry age for new customers is 45 years. The minimum entry age is 55 years for policies bought as Qualifying Recognised Overseas Pension Scheme (QROPS).
Key Features of Max Life Guaranteed Lifetime Income Plan:
- The policy provides guaranteed income for the entire lifetime of the insured.
- The customer can select between single life or joint life annuity options. The joint life annuity option enables the spouse of the deceased annuitant to receive the payouts till his/her death.
- In the absence of the insured, his/her spouse will receive the income under the plan as joint life annuity.
- If the annuitant passes away, the nominee will receive the purchase price of the insurance policy, excluding taxes, levies, and cesses.
- Annuitants can choose to receive the payout from the plan at an annual, semi-annual, quarterly, or monthly frequency.
- The minimum entry age under the plan is 50 years. For policies that were purchased under QROPS, the minimum entry age is 55 years. The maximum entry age under the plan is 80 years.
- There is no limit on the maximum purchase price.
How to Apply for Senior Citizen Insurance Plans?
Applying for senior citizen insurance plans is not difficult, once you finalize the policy you are going to buy.
Either you can apply online (if the service is available) or you can contact a particular insurance company for the same. Your insurance company will send a representative to help you get the right policy for your loved ones.
However, there is an easy way to compare senior insurance policies, i.e., through the online portal BankBazaar which will help you compare and choose among a variety of insurance plans dedicated only for the seniors. You can then go ahead and apply for the policy at the insurer’s website. This helps save time, money and effort; it also lets you make informed choices by reading through reviews of those who have already availed different policies.
Is it Possible to Get Insurance Cover for Seniors Over 80?
Yes, it is possible to get insurance cover for elders even after the age of 80 years. Life insurance for senior citizens is available for different age categories, viz. over 85, life insurance for seniors over 65, 65 plus life insurance plans, old age life insurance, 50 plus life insurance, life insurance for seniors over 70, etc. However, the availability of life insurance at this age depends on the state of your health.
Rates For Senior Citizens Insurance Plans:
The rates of senior citizen insurance policies differ depending on age. Also, factors such as health, lifestyle, family history, etc. affect the rates of these policies. Seniors with healthy lifestyles can avail better coverage at lower premiums.
How Can I Get Affordable Insurance Plans for Senior Citizens?
- Taking health precautions or maintaining a healthy lifestyle: Elderly people with good health find it easier to avail insurance coverage. Healthier individuals benefit from lower premiums as well.
- Be a careful shopper: Shop carefully by comparing the various senior citizen life insurance policies offered by different insurance companies at different premium rates. Evaluation is very important to find the right policy at the most affordable rate. Also, think about the right face value. Higher the face value is, the more final coverage it will provide.
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