Money talk: Do senior citizens need term insurance?

A term insurance policy is a working person's preferred financial protection instrument. Upon their death, the policy will pay a sum assured to their nominees whose long-term income needs will be taken care of. However, the same financial challenges may dog someone who has retired or is on the verge of retirement. Senior citizens may also have liabilities that are far from being settled — such as a home loan. They may have dependent family members — parents, spouse or children — with income needs that may outlast their own lifespans. It’s also plausible that their savings after the age of 60 are insufficient to sustain their dependents.

Life expectancy, too, is on the rise, almost doubling from 35.4 in 1950 to 68.3 in 2015. Women, often the nominees of life insurance policies, have a higher life expectancy of 70 years versus 67 for men, as per WHO data. Income needs increase with life spans, and therefore life cover may be required even at a late-life stage.

A term insurance policy provides low-cost life coverage with no investment benefits. Any person who meets the eligibility criteria can purchase one.

CAN SENIOR CITIZENS BUY TERM INSURANCE?
Yes, they can, albeit with certain limitations. Every term plan has an age eligibility criterion. Individuals between ages 18 and 60-65 can buy term insurance. The criteria vary from one insurance company to another as do the features of the policy. The lowest tenure of such policies may be 5 years going upwards of 80 years, depending on your age. For example, one insurance company allows you to buy its term plan at the age of 18 with a maximum tenure of 67 years, which means your coverage bought at the age of 18 will expire at the age of 85. There is also the option of full-life coverage, which may extend to the age of 99 or even 100 years!

SUM ASSURED & PREMIUMS
The minimum sum assured of such plans is typically upwards of Rs 10 lakh.
There may be no upper limit for the coverage with most leading insurance companies. The premium is influenced by three factors - your current age, your coverage requirement, and the tenure of the insurance coverage. The higher these three are, the bigger your premium will be. The premiums can be paid monthly, semi-annually or annually, as well as through a one-time payment before the start of the policy tenure. Additionally, many policies also allow you the option of paying premiums up to the age of 60 (till the end of your working life) while the coverage itself may extend well beyond that age.

HOW TO BUY
A term plan can be purchased online or offline after a due comparison of all options. Most term insurance policies require senior citizens to complete a pre-purchase medical test to ascertain their health conditions and whether they're suffering from pre-existing medical conditions. While applying for any life or health insurance policy, correctly disclose all material facts about your health. Concealing any information, misleading the insurer, and providing incorrect information can later become grounds for claim denial.

ADD-ONS
Like most term plan offerings, senior citizens too can include a variety of add-ons to boost their basic coverage. Of course, this comes at an additional cost. Some well-known add-ons today are monthly income (which pay the nominee a fixed monthly income over and above the basic sum assured), accidental death benefit (which pay an additional sum if the insured's death is caused in an accident), waiver of premium (where future premiums are waived off upon the diagnosis of terminal illness), and critical illness cover (where you are paid a lump sum upon the diagnosis of a listed illness).

If you're a senior citizen whose family will need financial assistance after your death, you should consider having a term insurance plan in your financial kitty.