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Why is it Important for Senior Citizens to have Life Insurance?

A life insurance plan is not only advantageous for young individuals but can also be immensely beneficial to senior citizens as well. Here are a few reasons why senior citizens may consider purchasing life insurance to help them secure their post-retirement future. But before we get to the main part of the article, let’s quickly take a glimpse at the concept of life insurance.

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Written ByPalak Bagadia
AboutPalak Bagadia
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Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry, with a strong understanding of the insurance sector.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 7th July 2024
Modified on: 7th July 2024
Reading Time: 15 Mins
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What is Life Insurance?

A life insurance policy is basically a contract between an individual and an insurance service provider. In this, the insurance provider agrees to provide life cover to the individual of a predetermined sum of money for a fixed period of time.

If the said individual were to face an untimely death during the agreed upon period of time, known as the policy term, the insurer would be obligated to pay the predetermined sum of money, known as the sum assured, to the deceased individual’s nominees. This sum of money can then be used by the affected family to further their life goals as they see fit.

In return for receiving this life cover, the individual would have to make certain payments, known as premiums, to the insurance provider at regular intervals.


Do Senior Citizens need Life Insurance?

Senior citizens may have dependents, unfulfilled life goals, liabilities or other financial obligations. In such cases, life insurance can help cover final expenses manage their debts as well as provide financial protection to their loved ones.

Here are a few reasons why they may need life insurance


  1. It covers the loss of income

    Although most senior citizens may retire by the time they reach 60, there may be some individuals who prefer to continue working for various reasons. In such cases, a life insurance plan can help provide the nominees of the working senior citizen with a financial safety net in the event of their death. The payout that the affected nominees would receive upon the death of the senior citizen may be used by them to cover any loss of income that they would have suffered.


  2. It covers financial obligations

    Home loans and other major financial obligations usually have a long repayment tenure. In some cases, they may extend well past an individual’s retirement.

    With a life insurance policy for senior citizens, older individuals can financially protect their family from unpaid financial obligations. The surviving family can simply make use of the proceeds that they receive upon the death of the senior citizen to settle their dues.


Benefits of Life Insurance for Senior Citizens

In addition to the ones elaborated above, opting for a life insurance policy for senior citizens also has a host of other benefits as well. Here’s a quick look at a few of them.


  1. Gives your surviving spouse/dependents financial independence

    One of the benefits of life insurance for senior citizens is that it gives the surviving spouse or other dependents some much needed financial independence. The death benefit that the surviving spouse receives can be used by them to sustain their lifestyle without having to depend on anyone for financial help. With a source of income by their side, the spouse will be in a better position to manage their day-to-day expenses.


  2. Allows your surviving spouse to take care of your dependent children

    Some individuals may choose to have children quite late in their lives. In such cases, the children might still be dependent on their parents even after they’ve become senior citizens. And in the case of a sudden death of a senior citizen, the children may be left helpless. However, with life insurance for senior citizens, the surviving spouse can use the death benefit payout that they receive to provide for their children’s life goals and their day-to-day expenses as well.


  3. Let you leave a legacy for your family

    One of the aims of every parent is to ensure that their children are well-settled. A life insurance plan can help senior citizens do this, because the financial payouts from the plan can add to the existing legacy that you may have in place, if any, to pass on to the next generation.


Types of Senior Citizen Life Insurance Available in India

Here are some common types of life insurance policies available for senior citizens:

  • Term Life Insurance – It offers a death benefit if the life assured passes away during the policy term.
  • Whole Life Insurance – It gives life cover to the life assured for the entire lifetime (throughout the life).
  • Endowment Plan – It offers both life cover and savings. You get a fixed amount (maturity benefit ) at the end of the policy tenure , or your nominee gets a amount known as death benefit if you pass away during the policy term.
  • ULIP (Unit Linked Insurance Plan) – It offers both life cover and market-linked returns. It gives flexibility to switch between funds , subject to policy terms and conditions.
  • Annuity Plans - An annuity plan for senior citizens in India provides guaranteed* regular income after retirement, either for a fixed period or for life. It helps ensure financial stability in old age and may include death benefits for nominees. Suitable for seniors seeking a steady, income.

Where Can Senior Citizens Find Life Insurance Products Suitable for Them

If you're looking for life insurance for a senior citizen, there are many ways to find the suitable policy:

  • Official Insurance Company Websites – Visit the insurer’s website to explore policies made for seniors.
  • Insurance Agents – Licensed agents can explain plans and help you choose the right one based on your needs.
  • Brokerage Portals – Some websites allow you to compare plans and premiums from different insurers.
  • Financial Advisors – They can offer personal advice and recommend the right life insurance product for senior citizens.
  • Senior Citizen Associations – These often host workshops or events with helpful insurance information.

Points to Remember About the Senior Citizen Life Insurance Premium Rates

Here are some key points about senior citizens’ term insurance and premium rates:

  • Premiums Increase with Age – The older you are, the more you may have to pay as premium.
  • Health Status Affects the Price – Medical conditions can lead to higher premiums or medical tests.
  • Compare Plans – Always check plans from different insurers to get the best rate.
  • Entry Age Limits – Many insurers allow senior citizens to buy plans till age 65 or 70. Policy Term – Most senior citizen plans offer a policy term between 5 to 20 years, depending on age and health.
  • Riders Can Add Cost – Adding riders such as critical illness benefit rider, accidental death benefit riders, or return of premium rider can increase the premium marginally but offer comprehensive coverage.

Conclusion

There you have it. Conclusive proof that, despite being senior citizens, older individuals can still reap the benefits of life insurance.

That said, many life insurance plans have a maximum entry age beyond which you may not be allowed to purchase them. Therefore, it is advisable to check the eligibility criteria of a life insurance plan before going ahead with your decision to purchase a life insurance policy for senior citizens.


FAQs

Can senior citizens in India buy life insurance policies?

Senior citizens can certainly purchase life insurance in India. They just have to meet the eligibility criteria and other factors set by the insurers


Which life insurance is best for senior citizens?

There isn’t one “best” life insurance plan—it depends on your goals. If you want simple and affordable coverage for a few years, a term insurance plan is a good option. The right plan is one that matches your age, health, financial goals, and how much you can comfortably pay.


Does life insurance cover death due to old age?

Life insurance typically covers death due to natural causes, including old age. As long as the policy is active and all conditions are met, the nominee will receive the death benefit.

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Disclaimers:
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IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

The Unit Linked Insurance Products do not offer any liquidity during the first five years of the contract. The policyholder will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of the fifth year.

ULIPs are different from the traditional insurance products and are subject to the risk factors. The premium paid in ULIPs are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.

The views stated in this article are not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read the sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale. Bajaj Allianz Life Insurance Company Ltd., Regd. office Address: Bajaj Allianz House, Airport Road, Yerawada, Pune - 411006, Reg. No.: 116, CIN: U66010PN2001PLC015959, Call us on toll free No.: 1800 209 7272, Mail us: customercare@bajajallianz.co.in

* Conditions Apply – The Guaranteed benefits are dependent on policy term, premium payment term availed along with other variable factors. For more details, please refer to sales brochure.

BJAZ-WEB-EC-16202/25

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Disclaimer

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


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Disclaimer

*Above illustration is for Bajaj Allianz Life eTouch II - A Non-Linked, Non-Participating, Individual Life Insurance Term Plan (UIN:116N198V01) considering Male aged 25years | Non-Smoker | Policy Term(PT)– 30 years | Premium Payment Term (PPT)– 30 years | Sum Assured opted is Rs.1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 5,092. 2nd Year onwards premium Rs. 5,520. Total Premium Rs. 1,65,172 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly instalments (Lumpsum Payout Percentage: 40, Income Payout Percentage: 60). Income payout instalment opted for 40 years | Premium shown above is inclusive of Online Discount only, no other discounts have been considered and exclusive of Goods & Service Tax/ any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

##Tax benefits as per prevailing Section 10(10D) and Section 80C (under old tax regime) of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

**5% Discount applicable for customer's first individual life insurance policy, applicable only on first year’s premium. 5% Discount for salaried customers, applicable only on first year’s premium. 6% Discount on online purchase is available for regular premium payment and limited premium payment frequency on first year's premium.

$Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium means total of all the premiums paid under the base product, excluding any extra premium and taxes, if collected explicitly.

Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any Call made, including via Voice over Internet Protocol & WhatsApp, SMS or WhatsApp messages, in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

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