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

If you’re looking for a way to secure your family’s financial future from life’s many uncertainties, a life insurance policy is a suitable option. However, whenever life insurance is mentioned, people tend to immediately associate it with young individuals.

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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.
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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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.

 

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 a 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.

And 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?

 

Now, when an individual who is an earning member of a family faces an untimely death, the family generally gets thrown into disarray. Since an income stream is basically cut-off due to the death of the earning member, the affected family may not be able to lead a comfortable life or be in a position to further their life goals as and how they may want to. Here’s where life insurance steps in. It basically provides a financial safety net to the family of an individual in the event of their untimely demise.

Going by this, life insurance seemingly is useful for individuals who are still an active earning member of the family and who haven’t retired yet. However, it can be beneficial to senior citizens as well. 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 pay-out 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 very long repayment tenure. In some cases, they may extend well past an individual’s retirement age.

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 financial independence

One of the benefits of life insurance for senior citizens is that it gives the surviving spouse 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 life. 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 pay-out that they receive to provide for their children’s life goals and their day-to-day expenses as well.

 

3. Let’s 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 pay-outs from the plan can add to the existing legacy that you may have in place, if any, to pass on to the next generation.

 

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 maximum entry age of a life insurance plan before going ahead with your decision to purchase a life insurance policy for senior citizens.

BJAZ-WEB-EC-00253/22

Disclaimers:
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~Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

The above information is for general understanding and is meant to educate the general public at large. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information. 

The views stated in this article is 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 sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

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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

 

Please refer to BALIC Privacy Policy

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Disclaimer

%%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

X
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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Life Cover + 16% Discount** +Save Tax*!
Under Section 80C & 10(10D) of Income Tax Act, 1961*
Get Life Cover + Save tax up to Rs 46,800*
₹2 Cr Term Plan
@ 21/Day²
Free Health Management Services
upto ₹ 31,000 p.a.^^

Disclaimer:

2Above illustration is for Bajaj Allianz Life eTouch II- A Non-Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N198V01) considering Male aged 23 years | Non-Smoker Preferred | Annual Income =>Rs. 15,00,000 per annum | Indian Resident | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 2,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 7,159. 2nd Year onwards premium is Rs. 7,760. Total Premium is Rs. 2,32,199 | 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.

**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, applicable only on first year’s premium.

*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%.

^^Get Free Health Management Services upto Rs. 31,000 per year

Health Management Services Frequency Cost (₹)
Doctor Insta-Consultations 3 consultations per month = 36 consultations per year Average cost per session = ₹500
Total cost per year = ₹500 * 36 = ₹18,000
Health Coach
(Diet & nutrition consultations)
1 consultation per month =
12 consultations per year
Average cost per session = ₹500
Total cost per year = ₹500 * 12 = ₹6,000
Emotional Wellness
(Psychologists consultations)
1 consultation per month =
12 consultations per year
Average cost per session = ₹500
Total cost per year = ₹500 * 12 = ₹6,000
Network discounts: Throughout the year Assumption – Total expense on these services throughout the year
Medicines (M) = ₹5,000
Lab-test booking (L) = ₹5,000
Total discounts that can be availed:
M - 10% = ₹500
L - 10% = ₹500
Total per year as per assumption ₹31,000

Note: The above mentioned costs are based on estimated average market price for respective services. T&C apply.

Doctor Insta-Consultations and Health Coach Services are unlimited and the above numbers are assumed only for the purpose of calculation of the yearly benefit.

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

 

BJAZ-OT-EC-10260/24

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