Should Senior Citizens Invest in Term Insurance?

Back in time, there were not a lot of term plans available in the UAE market that provided coverage to senior citizens or retirees. However, the insurance providers working in the insurance industry recognized the constraint and came up with plans that offered coverage to individuals above the age of 60. A term insurance plan is an absolute must individual of all age groups since it mitigates the various risks associated. In fact, with providers offering plans to senior citizens the popularity and sales of these plans have increased substantially. 

Importance of Term Insurance Plans for Senior Citizens

There are numerous reasons why retirees and senior citizens need term insurance plans. As mentioned earlier term insurance plans are pure risk protection and have no maturity benefits associated with them. These plans are affordable, flexible and user-friendly that makes them the most popular insurance product of all time. Here’s a quick rundown on the importance of term insurance plans for senior citizens: 

1. A term insurance plan will help your nominees to pay off any outstanding debts.
2. The sum assured provided at the end of the term plan will help your nominees to counter the strokes of financial instability.
3. The coverage not only helps to pay for day to day expenses after the demise of the policyholder but also allows the nominees to continue living with the same lifestyle.
4. In today’s era, it is a common practice to continue working after the age of 60.
5. Individuals who choose to discontinue working after the age of 60 can ensure a steady flow of income via term insurance in order to maintain the current living standard. 

Eligibility Criteria for Term Insurance Plan

As mentioned earlier, a couple of years back there were only a couple of providers that offered term insurance plans to people over the age of 60. In recent times, insurance seekers even above the age of 60 can get desired term insurance plans. However, insurance seekers should be well aware of the fact that the availability of the plan is subject to a medical examination. Once the applicant clears off all the medical examinations he/she would be eligible to get a term insurance plan in the UAE. An important point to be considered here is that the premium for term insurance plans for senior citizens is much higher than younger individuals.

Benefits of opting for Term Insurance Plans by Senior Citizens and Retirees

In this section of the blog, we will be discussing some of the major benefits of opting for term insurance plans by retirees and senior citizens.

Financial Stability

The first and foremost benefit of opting for a term insurance plan by senior citizens and retirees in the UAE is financial stability. According to recent statistics, the majority of retirees and senior citizens require some sort of medical assistance by the time they turn 65. Medical and health care expenses are extremely high and with increasing age, these expenses tend to rise substantially.

Health insurance plans cover a part of the total expenses incurred in the treatment. Without long term insurance policies, senior retirees might face financial difficulties. Sum assured from the term insurance plan offers proper financial assistance to the policyholders.

Financial Cushioning for family and Loved ones

Life is extremely unpredictable and nobody is aware of what might happen the exact next moment. Term insurance plans allow policyholders to secure the future of their family in case of any fortunate event leading to the demise of the policyholder. Typically, individuals retire from their jobs by the age of sixty. If you have dependents who rely on your earning for managing their finances term insurance plan is an absolute must.

The primary objective of a term insurance plan is that it provides financial assistance to the policyholder’s family so that they can maintain the same living standard.

Lower Premiums

As a basic thumb rule of the insurance industry, policies valid for long periods have considerably lower rates of premium when compared to other insurance products since there is no aspect of investment associated with the plan. Once the policy period is completed there is no return from the plan and hence these plans are referred to as pure risk protection plans.

Value for Money

Senior citizens usually prefer life insurance plans instead of term insurance plans. However, ideally, senior citizens should opt for low risk-based term insurance plans as investing in financial tools that have high levels of risks are not the right choice based on the age of the buyer. 

What to look for in a Term Insurance Plan when purchased by Senior Citizens

Term insurance plans are quite diverse and come with a plethora of different features; here are some of the important points to ponder while buying term insurance plans for senior citizens and retirees.

1. The age limit set by the provider. Typically insurance providers offer plans till the age of 65 but the eligibility criteria vary from provider to provider.
2. Since term insurance plans are pure risk protection plans they do no pay for medical expenses like health plans. The only condition in which the sum assured is payable from the provider’s end is the demise of the policyholder. However, a wise choice to be made in such a scenario is opting for the return of premium plans where the insurer pays a fixed percentage of the total premium paid to the nominees.
3. Payable premium is another factor to be taken into consideration while opting for a term insurance plan, especially for senior citizens. As mentioned earlier senior citizens are supposed to pay higher rates of premium when compared to younger individuals due to health and medical constraints.
4. Medical Examinations are a mandatory part of buying a term insurance plan for all age groups. The medical examination criteria vary from provider to provider and some of the providers do not require medical examination all they are documented proofs of your medical history.
5. Adding riders to the basic term insurance plan for senior citizens enhances the utility and strength of the plan. Riders are additional features that can be added to the basic term plan to maximize the returns and benefits of the plan. 

Conclusion

While the payable premium for term insurance plans increases exponentially for insurance seekers that are above the age bracket of 60 and are classified as senior citizens or retirees. The level of potential risks increases with age so it is highly recommended that people in this stage of life should buy a term insurance plan so that their dependents can spend their lives without worrying.

However, if you save on all that additional expense that you’ll have to pay in the form of premium you should consider buying term insurance plans at an early age. Before you go ahead and purchase a term insurance plan you should research online and offline to make sure you get the plan that suits all your requirements at the lowest cost.