A Guide on Life Insurance for Senior Citizens

Are you looking to purchase life insurance for your parents? It’s easy to get caught up in misconceptions and myths about life insurance for seniors. But in reality, senior citizen life insurance isn’t much different than a regular plan. In fact, it is a vital component of retirement planning, offering financial security and peace of mind. 

Read on as we help you understand the vitality of senior citizen life insurance and help you pick one for your parents. 

Can Senior Citizens Get Life Insurance?

Senior citizens can easily get life insurance or their children can buy a senior citizen life insurance plan on their behalf. Either way, the benefits of senior citizen plans are similar to those offered under plans for younger applicants. 

It is important to note that the definition of a person being a senior may vary based on the insurer. In general, people above 60 or 65 years of age are considered senior and are eligible for senior citizen insurance.

Moreover, insurance providers offer multiple policies to accommodate the unique needs of elders. These include:

• Term Life Insurance: These are pure protection plans that provide coverage to senior citizens for a specific period. Beneficiaries receive cash payout as a death benefit in case the policyholder dies during the policy term.
• Whole Life Insurance: These plans offer coverage to elderly policyholders throughout their life. The benefits include a death benefit upon the policyholder’s death and a withdrawable savings component that accumulates interest over time. 
• Pension Plan: Pension or retirement plans provide pensions to senior citizens, helping them replace their salary after retirement. Upon the policyholder’s demise, the insurers provide pensions to the spouse. 

Why Do Senior Citizens Need Life Insurance?

Here are five reasons why one must buy life insurance for seniors:

1. Cover Final Expenses

Upon a person’s death, the family bears the burden of funeral costs, medical bills, or outstanding debt. If the elderly person is insured, their family can settle these expenses with the cash payout they receive as the death benefit. 

2. Leave an Inheritance

Unlike property and investments, insurance provides people with an easier method of leaving behind a financial legacy for their heirs. The cash payout from the policy can provide significant support to the next generation.

3. Support a Surviving Spouse

Life insurance policies, like pension plans, help senior citizens replace their income after their professional careers end. They also extend benefits to the surviving spouse in the policyholder’s absence, helping them remain financially secure in their later years. 

4. Contribute to Family Goals

For senior citizens who are the sole earners, life insurance is also perfect to help the family achieve its goals. With the death benefit the family receives, they can pay for their grandchildren’s education or invest it in a business.

5. Pay Off Debts

The term plan’s death benefits help the family pay off the policyholder’s debts or pending loans after their untimely death. This secures the dependents and mitigates unexpected financial burdens. 

Consideration Before Buying Life Insurance for Senior Citizens

Here are some things to consider before purchasing a  life insurance plan for seniors:

1. Carefully Select the Life Plan’s Duration

Life insurance plans for senior citizens usually have shorter term periods, ranging from 10 to 25 years. Pick the duration over which your parents can easily pay premiums without exhausting their savings. Also, avoid the shortest tenure available, as it may leave them without any coverage in the later years of their life once their current policy expires.

2. Assess Your Parent’s Coverage Needs

Senior citizens must assess their financial obligations and retirement plans to determine how much coverage they need. This will also help them pick an ideal tenure for their policy over which they can comfortably pay premiums. 

3. Understand Policy Terms

Before purchasing a plan, people must understand the terms and conditions set by the insurer. They should certainly be clear about the premium to be paid, tenure, benefits, and exclusions of their policy to avoid confusion in future. 

4. Include Add-ons to Your Parent’s Policy

You can enhance the coverage of the base insurance plan by including add-ons or riders. You can purchase them by paying slightly extra towards insurance premiums. Consider the following add-ons when purchasing life insurance for senior citizens:

• Waiver Of Future Premium: The add-on waives off any remaining premium payments in case your parents suffer permanent disability or are diagnosed with critical illness.
• Return Of Premium: If your parents outlive their insurance policy’s tenure, this add-on ensures that they’ll receive a guaranteed lump sum amount at maturity for the total premiums they paid.
• Terminal Illness Cover: This add-on provides financial support if your parents are diagnosed with incurable illness during the policy’s tenure.
• Accidental Death Benefit: Accidents can happen to anyone. This add-on provides an additional payout to beneficiaries if the policyholder dies due to an accident.

5. Evaluate Health and Medical Conditions

Your parent’s health status can affect which policies they can get and at what cost. So, consider how their health might affect insurance premiums and choose policies accordingly.

6. Compare Different Policies

Senior citizens must not settle for the first policy they see. Instead, they must compare plans from multiple insurers to see how their premiums, tenure, benefits, etc., vary and pick the best policy that aligns with their needs.

7. Check the Insurer’s Reputation

It’s also essential to research the insurer’s financial stability and customer service before purchasing insurance from them. To gauge an insurer’s reputation, consider the following metrics:

• Claim settlement ratio
• Claim paid ratio
• Amount settlement ratio
• Claims rejected 
• Complaints filed against the insurer

Key Takeaways

Old age isn’t a barrier to your parents getting life insurance. Senior citizen life insurance policies are available for everyone who meets the eligibility criteria established by insurance providers. 

Depending on their needs, your parents can choose between term plans, whole life insurance, and pension plans. Furthermore, with a life insurance plan, parents can ensure their family remains financially secure even in their absence.

Consider platforms like PhonePe to make an informed decision about life insurance for senior citizens.