Do senior citizens need to buy term insurance?

by Marie Rodriguez

Health is wealth. There is no greater wealth than your own health. During our youth, it is easy for us to recover from any illness. Also, our immunity is strong enough for us to fall sick less often. However, as we grow older, our body goes through significant changes which impacts our health as well.

If you are someone who is in an older age range with dependents relying on you, one might suggest you go for a term plan. However, with growing age, the cost of a term insurance plan also increases greatly. Read more to know when and if you should consider buying term insurance at an older age.

term insurance

What is term insurance?

A term insurance is a type of life insurance policy. In a term plan, your insurer will compensate your family with a life cover amount in the event of your untimely demise. This amount can be used by them to tackle day-to-day expenses and prepare for the future as well. You will see different plans on offer when you will be looking to invest in one. You can opt for a higher life cover plan, or a short duration plan, based on your requirements.

Should you buy term insurance for senior citizens?

Sharad is 59 years old. He plans to retire from his job at the age of 61. However, Sharad’s wife is financially dependent on him as they have no children of their own. Sharad is also a patient of diabetes. Considering his age and medical condition, the cost of treatment alone eats up a chunk of his income and savings. With less savings, if Sharad were to pass away, his wife would be incapable of handling expenses. No viable source of income and depleted savings would leave her facing financial instability alone.

This is just one example as to where a term insurance would come handy at an older age. What are the situations you should consider before you invest in a term insurance plan for senior citizens? Listed below are some of them:

1. Co-dependents

There can be co-dependents who are relying upon you. It could be your children who are not entirely financially independent. Or it could be some relative who does not have any source of income and is dependent on your care and income. In such situations, it is advised to opt for senior citizen term insurance. In the event of your sudden demise, your co-dependent will receive the life cover amount which would help them stay financially stable for a certain time period.

2. Spouse

Just like the example mentioned above, there are old couples where the spouse is dependent on the earning member of the family. Many times, due to having no children, people work in their old age as well to support the family. In such situations, your spouse could become financially vulnerable if you were to pass away suddenly. She would be forced to borrow money or sell or mortgage things in order to manage expenses. A senior citizen term insurance will help her avoid such situations. Not only would the pay-out help her with the daily expenses; it would also allow her to be financially independent.

3. Loans

You or a family member might take out a loan for any valid reason. It could be a home or vehicle loan. It could also be a business loan. Or money could have been borrowed due to some emergency. For example, you borrowed an education loan to send your child abroad for higher studies. However, if you were to pass away before your child could find a job and the repayment cycle were to start, your spouse and child would face financial burden while trying to clear the loan. Having senior citizen term insurance in such situations would be helpful as the life cover amount could be used to pay off the loan and any other outstanding debt.

These situations should be considered before purchasing senior citizen term insurance. Do keep in mind that different insurers have different term insurance age limits. So, make sure to get a clarity on the same before investing in a plan.

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