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Do you need life insurance after 65?

dateKnowledge Centre Team dateAugust 13, 2021 views174 Views
Best Life Insurance Plan | Buy Life Insurance Plan | Guaranteed Savings Plan

Providing financial protection, in case of loss of income, due to death is the basic tenet of life insurance. How will the dependants survive if the breadwinner dies? Life insurance is critical in households that have only one earning member and one or more dependants. People hitherto worked only until 60 or 65 because a more conservative India wrongly believed that older people may not be medically fit to work beyond that age. Life insurance policy for senior citizens did not sound logical to actuaries because there was no clear insurable interest.

The demise of a non-earning/retired person would not cause any “loss of income” and hence insurance covers did not make financial sense. This rationale made insurers cap the upper age at 65.

However, a new fast-growing India has given rise to a demand for professionals in the private sector that is shedding inhibitions of age if the person is medically fit and brings talent to the table. This has in turn created a need for life insurance cover for senior citizens over 65 and until even 90. Smart insurance providers have felt this gap and some of the reasons why people aged over 60 may need life insurance.

How a Life Insurance Plan can Help you After you Turn 65?

Take the case of Ramesh who is 66 years old and is working as a CFO for a new age well-funded start-up in Bangalore. The start-up founders hired Ramesh because they wanted an experienced hand to manage their finances. After all, grey hair (or no hair!) are both conventional symbols of wisdom!

Ramesh pays an annual premium towards a life insurance cover and is very clear why he needs it:

1. His wife, Rashmi, is a homemaker and is financially dependent on him. Even though Ramesh had some savings in PF and PPF, he wanted Rashmi to be independent even when he would not be around. Asking kids for money is a strict no-no.

2. Ramesh and Rashmi could not amass too much wealth in their prime time due to various personal commitments. However, they are still keen to leave behind some wealth for their children. A life insurance cover is a good way to bequeath some money.

3. Ramesh had availed of a large personal loan to overcome a temporary setback in life. Although he repaid almost 50% of the loan, he felt that an insurance cover will help in case he dies before the completion of repayment. He did not want to burden his wife and children with debts.

Types of Life Insurance Plans

Life Insurance Plans have also evolved in the last two decades and now offers different variants to suit the diverse needs of a growing aspirational Indian populace.

1. Term Cover

This is the most elementary plan in the life insurance products stable. This is a pure life cover that pays out the sum assured in case of the policy holder’s death.

For example, if Suresh and his wife Surekha are both 65 and working, they can opt for individual iSelect Star Term Plan offered by Canara HSBC Oriental Bank of Commerce Life Insurance or sign up for a joint policy that works out to be cheaper.

2. ULIP Investment Plans

ULIP plans are versatile life insurance investment plans. These plans not only help you invest in diverse instruments for higher growth, but they also have a life insurance cover. These plans are perfect for achieving important long-term financial goals for your family.

3. Guaranteed Plans

Guaranteed plans are also long-term saving plans, except these plans offer guaranteed maturity values. Thus, you will know the maturity value of your investment at the beginning itself. These investment plans are safe investments and help you preserve your wealth.



Learn these 6 benefits of buying savings plan with guaranteed income.

4. Annuity Plans

Annuity plans are safe investment plans which help you secure a regular income in your employment free years, i.e., retirement years. You can either start the annuity with a large lump sum investment or invest for a while before starting the annuity. These plans can guarantee lifetime income. Thus, offer financial security during your lifetime.

Life Insurance Plans You Can Buy After 65 by Canara HSBC Oriental Bank of Commerce Life Insurance

Not all of us are going to be lucky enough, or willing enough like Ramesh, to continue working even after 65 years of age. Thus, your life insurance and other financial needs also change, and as a result the need for life insurance. At this age, your life insurance needs changes from entirely protection and tax-saving to income guarantee and legacy.

Thus after 65, depending on your life preferences, you may need the following insurance plans:

a) Term life insurance cover
b) Pension plan with guaranteed lifetime income
c) ULIP plans for tax-free regular income and growing unused corpus

Invest 4G ULIP Plan

Invest 4G, offered by Canara HSBC Oriental Bank of Commerce Life Insurance, meets the most common objectives that you have:

a) Wealth creation
b) Life insurance
c) Regular and tax-free pay outs like pension
d) Leaving a legacy for your grandchildren

Invest 4G is designed to gain from the dynamics of movements in the financial markets to give you superior returns in the targeted period. Even the amounts invested each year are deductible, under section 80C, from your taxable income.

In case of your unfortunate demise, your nominee would receive the higher of sum assured or fund value. There is another option that pays the sum assured on demise and the company funds the future premiums until maturity. The fund value is then paid to the nominee.

Invest 4G is a classic investment cum insurance product designed to give a sizeable corpus in all cases so that you or your family are always financially sound.

Pension4Life Annuity Plan

Pension4life plan is another exciting policy, from Canara HSBC Oriental Bank of Commerce Life Insurance, that gives an income stream called an annuity, at pre-defined intervals, even after 65 thus taking financial stress off your shoulders. The joint annuity options ensure that you remain stress-free about your partner’s expenses in case of your demise. There is another silver lining, around the dark emotional scar, that returns the entire initial investment to the family in the case of your demise or of critical illness or accidental total and permanent disability before the age of 85.

You are the best person to decide whether you need life insurance after 65 because it depends on your circumstances and commitments. However, having an insurance policy will do good than harm. If you decide to apply for a policy, you must compare different offerings and match them against your needs. Every person’s need & situation is unique and therefore you should not generalize the challenges or benefits across all people of similar age.

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Frequently Asked Questions (FAQs) Related to Life Insurance Policies

The premium is one of the most important factors to consider before buying a life insurance policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the premium calculator available in the 'Tools and Calculator' section of www.canarahsbclife.com.

Life insurance plans come with several riders which increase the efficiency of the policy for the buyer. For instance, if you have a history of terminal illness in your family it would be advisable to opt for terminal illness rider with your term insurance plan. Riders or add-ons help in customising the standard policy benefits for the requirement of different families. The iSelect term insurance plan comes with a built-in cover for terminal illness, and option for protection against accidental death or disability. You can also opt to cover your spouse's life under the same policy by paying an additional premium.

Life insurance companies calculate the premiums based on several factors such as age, gender and occupation.

Age: It is one of the biggest factors that influence life insurance premiums. Premiums tend to be low when the life insured is younger as the chance of contracting diseases is low. Young people also opt for the best life insurance policies with longer tenures and pay premiums for a longer duration, which makes the policy cheaper for young people.

Gender: The insurance premium for women is generally lower when it comes to life insurance plans. Women live longer and pose a lesser risk of a claim leading to lower premiums for them.

Lifestyle habits: The premiums for people who smoke or drink is always higher due to higher health risks.

Policy term: Policy terms are also taken into consideration by insurers while deciding the premium amount. Life insurance policies with longer tenure are cheaper as compared to short-duration policies.

Mode of purchase: The platform that you use to buy the best life insurance policy also determines how much you will have to pay for the plan. People who buy life insurance policies online have to pay lower premiums as compared to offline policies.

Occupation: The nature of your work is an important factor that influences the premium amount. Certain occupations like shipping and mining are considered more dangerous as compared to jobs in services industries. The insurance premium rises with the risk profile.

Processing life insurance claim is a transparent and smooth process with Canara HSBC Oriental Bank of Commerce Life Insurance.

In case of the death of the life insured, the nominee will have to intimate the company by filling a Death Claim Form and sending it to the nearest branch office.

Once the form is received, the claim is registered by the insurer.

After the registration of the claim, the company will send the claims pack along with the related forms such as physician’s statement form and employer certificate that need to be filled.

Along with the duly filled forms a few documents such as original [policy document, death certificate, copy of bank passbook, hospital or treatment records, photo identification and address proof have to be provided.

The claim is processed on the submission of relevant documents. Once the documents are verified, the claim amount is released post all due diligence.

Household expenses rise with age. The cost of children's education increases along with other lifestyle expenses. The iSelect term plan offers an option to increase the cover according to the life stage. If opted, the insurance cover increases by 25% at every 5-year terminal till the 20th policy year.

Even though a life insurance policy is bought to protect your family in your absence, there are chances of the claim being rejected due to several factors.

False information: If the policyholder provides false information or conceals important information while buying the life insurance policy, the insurer has the right to reject the claim after his/her death.

Type of death: Deaths due to suicide in first policy year, intoxication or pre-existing disease is not covered under life insurance plan.

Premium payment: The payment of premiums on time is of utmost important to avail the benefits of life insurance. Life insurance policy may lapse on the failure to pay the premiums

Nominee details: A life insurance company can put the claim on hold if the nominee details have not been filled or not been updated by the policyholder.

Suicide: If the life insured commits suicide within 12 months of buying the life insurance policy, the insurance companies generally pay 80% of the total premiums paid.

Buying the best life insurance plan online is not only safe but a better option. Online life insurance policies have lower premiums and the individual is not required to visit the insurer's branch or a bank. The best life insurance policies online insurance offer higher benefits. Customers should, however, buy online life insurance policies only from credible insurers and should check for SSL certificate on the website to ensure that the website is legitimate.

The cost of life insurance policies varies depending on factors like age, gender and occupation. The average cost of life insurance plans, especially term plans, is very low compared to the amount of coverage offered.

An individual is allowed to have multiple life insurance policies. People opt for more than one life insurance policy to increase the cover or avoid claim rejection. In case of multiple life insurance policies, even if the claim is rejected by one insurer, the beneficiaries may receive the benefit from a different insurer.

Life insurance policies are of different types. In case of unit-linked or endowment policies the policyholder receives the maturity benefit at the end of the policy term. However, in the case of term insurance plans, there are no maturity benefits. The death benefit is only paid out after the death of the life insured.

When you buy a life insurance policy, the insurance company asks for the nominee details. Only the person named as the nominee in the life insurance plan can cash out in case of death of life insured.

A life insurance policy is generally taken for a specified period. After the policy duration of a term plan gets over, the policy simply terminates and ceases to exist. However, in case of unit-linked plans or endowment, you can use the policy as a tool for retirement planning and the accumulated corpus is used by the insurer to pay you monthly amounts for your entire life.

If a policyholder purchases a term plan for 25 years and dies during the policy term, the beneficiary receives the death benefit. In case of iSelect term plan, the policy provides four payment options to the beneficiaries. If the regular payment option is chosen, the policy works as a source of regular income.

It is a popular misconception that life insurance plans are only for accidental deaths. A term life insurance plan like iSelect Star Term Plan also covers terminal disease along with death. A terminal illness cover is important as health insurance pays only for the cost of treatment and hospitalization, but a terminal illness cover pays you a lump-sum amount which takes care of other expenses. On the other hand, unit-linked policies such as Invest 4G cover death and also provide decent returns for other financial goals such as buying a house of child's education.

It is ideal to buy a life insurance plan in your early 20s because it is the time when people have just started with their professional life and so there are lesser responsibilities and financial liabilities to take care of. Also, if you buy the best life insurance plan at this age, you will be paying relatively lower insurance premiums since it’s a due fact that mortality rate in case of young people is low. And that is why life insurance companies offer lesser premium rates to younger people as they think that they are most likely to be fit and healthier with less chances of filing a claim in future.

Once you have cancelled your life insurance policy, you will instantly lose your life insurance cover. Afterwards, your insurance company will get in touch with you and ask for valid reasons regarding the cancellation of your policy. In case you cancel your life insurance policy within the grace period, i.e. 15 to 30 days, depending on your insurer, then insurance company will reimburse the premium amount paid by you. But, no refunds will be paid to you if the policy is cancelled after the grace period.

Yes, you can take life insurance under Married Women’s Property (MWP) Act, 1984 only if you are a married man and a resident of India. Buying a life insurance plan under MWP Act would be helpful in saving your family’s financial well-being when you are not around. As per this policy, only wife and children would be eligible to receive the death benefits. You can also buy a policy if you are a widower or a divorcee. However, in that case, you can give your child’s name as your beneficiary. It is very simple to buy a life plan under MWP Act. All you need to do is to fill up an MWP addendum while purchasing an insurance policy.

Yes, there are different payment options for you to pay premiums. Here’re some of them

    1. Regular premium payment option – This premium payment option allows you to pay premiums equal to your policy term either monthly, quarterly, half yearly or annually.

    2. Single payment option – Through this premium payment option, you can pay the lump-sum amount in one single payment.

    3. Limited payment option -In this premium payment option, you can pay premiums for a specific period of time less than policy term either monthly, quarterly, half yearly or annually, but benefits of insurance can be enjoyed for a longer period of time.

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