5 Best Senior Citizens Life Insurance Plans and Their Key Features

Life insurance plans financially secure your loved ones. They are not designed only for the early years. It is an indispensable tool at every life stage. With life expectancy on the increase, it is recommended that older individuals invest in a life insurance plan. Read on to know everything about life insurance plans for senior citizens.

Best Senior Citizen Plans

Senior citizens have a wide choice of life insurance plans depending on their requirements. 

Endowment Plans

An Endowment plan is a life insurance plan that provides the dual benefit of insurance-cum-savings. The key features of this plan are:

• The maximum entry age i.e., the age to purchase the plan is 60 to 65 years.
• The policy term can be chosen between 10 to 40 years depending on the entry age. The term should align with the exit age which generally will be 75 years.
• Various options are available under the plan that facilitate wealth creation while providing financial security to you and your family by way of death benefits as well as maturity benefits. 
• You can add riders to your policy like critical illness coverage, permanent disability rider, and accidental death rider.
• In case of emergencies, you can avail a loan against the surrender value of the policy.
• You can pay the premium either monthly, quarterly, half-yearly, or yearly.
• Some of the endowment plans provide additional bonuses which is an additional amount added to the policy proceeds.
• Tax benefits can be availed of under Section 80C of the Income Tax Act 1961 for the premiums paid.

Term Plans

A term plan offers pure protection. It provides life cover during the policy tenure. In case of an unfortunate event, the beneficiaries of the policyholder are paid a predetermined amount. Given below are the benefits of the term plan.

• The age limit for the purchase of the plan ranges from 60 years to 65 years depending on the insurer.
• The coverage is offered for a specific period depending on the age at the time of purchasing the plan and the retirement age of the individual. 
• The plan provides coverage for critical illness and medical expenses.
• The health condition will be assessed via a medical checkup and the premium will be fixed accordingly.
• Term insurance plan helps take care of dependent children, Also, the death benefit received from the plan can make one’s spouse financially independent.
• Term insurance tax benefit can help you to increase savings as you get a deduction of Rs. 1.5 lac under Section 80C of the Income Tax Act.

Before purchasing a term plan, senior citizens should assess the coverage required, compare premiums and benefits, look for riders, and read the terms and conditions of the plan.

Whole Life Insurance Plans

The coverage period is not restricted in the case of whole-life insurance plans. The features of this plan are:

• Cover is provided up to 99 years and the family of the policyholder’s family is entitled to a death benefit until that period.
• It has both an insurance and investment component and the premium is slightly higher than other insurance plans.
• Tax Benefits under Section 80C of the Income Tax Act 1961 for the premium paid is available.
• Since these policies have a surrender value/cash value component, you can avail of loans against the policy when in need of funds.
• Multiple options for premium payment like monthly/quarterly/half-yearly/yearly are available.

Retirement/Pension Plan

Retirement or pension plans provide a retirement corpus or a steady income after the monthly salary stops on retirement. The features of these plans are:

• The maximum entry age is 65 to 80 years depending on the insurer.
• The policy term also depends on the insurer. It is generally the maturity age minus the entry age.
• The policyholder can opt for the immediate annuity or deferred annuity option. For an immediate annuity plan, a single premium paid in a lump sum will create a stream of monthly income for a specific period or the entire life. In a deferred annuity you can choose for a fixed income from a future date. You can save money when you are earning to generate a steady income post-retirement.
• You can avail of tax benefits under 80C of the Income Tax Act 1961 for the premiums paid.

Unit Linked Insurance Plans

Unit-linked insurance plans are a great advantage for individuals aged 60 years and above. The features of the plan are:

• Since a part of the premium is invested in market-linked securities, it will help you create a retirement corpus to spend your retired life in peace.
• You can choose to pay a single premium, for a limited period, or throughout the policy term 
• The plan provides you with the option to choose your investment portfolio. You can also switch between funds depending on the market performance and your risk appetite.
• The insurance component will provide financial security for your family in case of any eventuality.
• Partial withdrawals in case of emergencies are permitted after 5 years from the date of purchase of the policy.
• Tax deduction benefits under Section 80C is available for premiums paid up to 10% of the sum assured.
• Partial withdrawals are tax-free.

Conclusion

How peacefully you lead the golden years post-retirement depends on how financially you are secure. Your retirement plans are limited to the early years of your life is a myth. It is even more important to think of retirement plans when you are nearing retirement and have a lot of unfulfilled commitments. Choose from the senior citizen life insurance plans mentioned above and make your life after retirement financially secure.