Age for term insurance coverage

India still lags far behind in providing adequate life insurance protection to its citizens. Life insurance penetration, which is new business premium for the year calculated as a percentage of the GDP, is abysmally low for India. According to the Insurance Regulatory Development Authority of India (IRDAI), life insurance penetration in 2019 was 3.6%; an improvement over the last few years but still one of the lowest in the world. [1]

Indians are yet to give life insurance the importance it deserves and most individuals go for life insurance quite late in their life, which then becomes costly to purchase. However, term insurance which is relatively cheaper than other forms of life insurance also has few takers in the country.

A recent survey conducted among 4,500 respondents in 15 cities revealed some startling facts on how young people between 25-35 years (millennials) think about life insurance. The study revealed that millennials were happier to spend on travel and luxury items but reluctant to protect their families with life insurance. Strangely, only 44% of youths knew about term insurance and only 17% had bought term life insurance for themselves. [2]

Term insurance age limit

Statistics show that individuals in their 40s comprise the bulk of life insurance policyholders in India. As responsibility increases and the fear of retirement starts ringing bells after the age of 40, even those who were reluctant to get insured earlier rush to save for retirement or protect their family with a term insurance or whole life insurance policy . Though premiums for whole life insurance, ULIPs, and endowment and retirement plans can get expensive when you reach 40, still you may be able to collect a substantial corpus at retirement.

However, with most insurers increasing their term insurance age limit, today even individuals over the age of 60 can avail term insurance for senior citizens. For instance, Future Generali Flexi online term plan has a term insurance age limit of 65 years with coverage up to the age of 75 years. It offers a high life cover at a low premium.

Why term insurance for senior citizens is critical

Most people think that buying term insurance for senior citizens is not important; it may be right to some degree as they have already crossed or reached the age of retirement. However, not every person above 60 retires with an ideal financial situation. What if their children don’t have a decent job? What if their retirement planning was not successful? In the following cases, a person above 60 years will require term insurance:

When children are financially dependent

Unemployment is at a 45-year high in India and many youths even those in their 30s are depending on their parents for their daily expenses. While their parents are already in their 60s, some children are still getting education or training to get a job. All their education and daily expenses are being borne by the parents. In such a situation, a term insurance protects their children in case of their unfortunate demise.

When you have outstanding debts and liabilities

It’s not rare to see people working well after their retirement age to pay off debts such as a home loan, personal loan or education loan for their children. What happens if the earning member of the family passes away? Who will pay off the loan? Well, there’s term insurance for senior citizens to take care of that. A term life insurance offers much needed financial protection to the family to pay off debts and liabilities and live a decent life.

When you care about your spouse

You have seen the ups and downs of life together but life is unpredictable. Your spouse will be left alone to take care of your children and it’s going to be tough for her without financial protection. A term insurance plan is the least you can do for your family whether you are in the 20s or your 60s to protect them in your absence.

In parting, don’t let the high premium cost discourage you from getting term insurance protection even if you are well over 60 years. The little extra you’ll be spending now will go a long way in taking care of your loved ones in your absence.