Life insurance for senior citizens is indispensable, considering how it offers a basic financial safety net for their families. You may think that by the time a person retires, he/she will have mostly taken care of family commitments. At the same time, his/her children should already be settled or on their way towards financial independence. Yet, there are several scenarios where seniors need to take care of their spouses and even dependent children after they retire. Some may also have to make loan repayments, while the increase in life expectancy may make it imperative to look after even older family members and dependents. Thus, there is a clear need for life insurance as far as senior citizens are concerned.
Various Types of Life Insurance for Senior Citizens
Here are some of the main types of life insurance for senior citizens.
Term Life Insurance – It comes for a fixed duration, and a sum assured is paid to nominees in case of the policyholder’s demise. This remains fixed, along with the premium for the policy. While the policy typically lapses once the policyholder survives the duration, some plans offer options to convert or renew coverage. There is another type of term plan where the sum assured remains fixed, but some plans may offer a gradual increase over time to help tackle inflation. The third version is the return of premium aspect, which offers a future savings/investment option in case the person outlives the policy tenure.
Whole Life Insurance – These plans offer protection up to 99 or even 100 years of age. However, they not only offer life coverage but also a cash value component. You can invest your money in a cash value account while getting tax benefits and future wealth creation.
Retirement Plans – There are many insurance companies that offer retirement plan options for seniors, which combine life coverage with regular income and investments. There are plans that are available for people up to the age of 85 in many cases. However, the entry age varies significantly by insurer and is often limited to 65 by some insurance companies. Starting early with these plans is recommended to benefit from the compounding of the investment, while being able to flexibly earn monthly income after retirement. The life coverage component also ensures adequate financial security for the family.
Life Insurance for Senior Citizens – How to Choose
When it comes to choosing the best life insurance for senior citizens, stick to your own goals and financial circumstances. Plan your coverage amounts carefully and check your affordability in terms of the premium payments. Make sure you understand the terms and conditions of each policy type and its features/benefits before going ahead. At the same time, look for exclusions/inclusions in coverage along with available riders that can help you ensure financial protection in diverse scenarios, such as critical illness riders. If it is a retirement plan that you’re considering, start as early as you can to enjoy its benefits in your later years. Whole life plans should also be started in your working years to enjoy the benefits later on.