LIC Policies for Senior Citizens

In order to help the senior citizens feel protected, LIC of India offers special senior insurance policies that are exclusively designed for the elderly Indians. The number of senior citizens in India is rising with an increase in the rate of life expectancy. It is essential to make them feel protected as senior citizens generally tend to feel lonely and vulnerable as age weakens them both physically and financially. Well, the physical problems of age are inevitable, but insurance policies can ensure that the elderly population stays financially, and hence mentally, secure.

Why Do Senior Citizens Need Insurance?

There are innumerable reasons why senior citizens need insurance policies. The primary reason is that such policies can support them and their families by acting as a replacement for monthly income and especially in the unfortunate event of the primary earner's death. Thus, insurance policies are instrumental in such situations of financial tension, as they not only act as a channel for savings but also provide an income source when the policy term ends. Moreover, the lump sum received from such policies can be utilized to pay off existing debts or meet medical expenses.

Different Types of Senior Citizen Insurance Plans

There are numerous types of life insurance plans for seniors to help avoid financial stress. These plans generally fall under two major categories - “Whole Life Insurance Plans” & “Term Life Insurance Plans.” Apart from these two, “Guaranteed Life Insurance Plans” can also be largely beneficial for senior citizens.

Term Life Insurance:

Term insurance plans meant for senior citizens provide coverage for a specific period. The coverage ends when the policy period ends. Death benefits are paid to the beneficiary/nominee in the event of the policyholder's death during the policy tenure. These are no-frills-attached pure protection plans. Term insurances are generally quite affordable and more flexible than whole life plans. One can choose the tenure, the sum assured, and the payment frequency based on their needs and capabilities. Some of these policies offer renewal facilities to renew the policy for a new term when the initial term is over, therefore extending coverage even with a progression in age. While buying term insurance plans for senior citizens, one must spend some time and consider the various quotes offered by different insurance companies and then compare them closely to select the most appropriate plan based on the coverage and affordability.

Whole Life Insurance:

This comprehensive form of insurance provides insurance coverage for the policyholder's entire life. Hence, these do not have any fixed policy period. When the policyholder dies, the insurance payout is transferred to the nominees/beneficiaries. There isn't any age restriction when it comes to buying these insurance policies. A savings component accompanies these policies, along with the original insurance coverage. Therefore, whole life plans are more pricey than term insurance plans that do not have a savings component. Many other attractive features, like consistent premium payments over the entire policy tenure, tax redemptions, permanent protection, cash value growth, aetc., are also offered by Whole Life Plans. As these plans offer guaranteed cash value, policyholders can easily access their cash through several withdrawal options.

Retirement Plans

A Pension or Annuity plan is an insurance product best suited for post-retirement usage. It pays income to the policyholder. An individual needs to invest in the annuity scheme and the policy makes payments on a future date. These payments are typically determined on the length of the payment period. A Pension Plan ensures that the individual continues receiving regular income after their retirement.

Features of a senior citizen retirement plan:

• Regular payouts ensure financial independence after retirement

• Extensive range of variants (or income option) to choose from, based on the customer's retirement needs.

• Flexible annuity payout frequencies - monthly, quarterly, semi-annually or annually.

• These are specifically configured for senior citizens and the entry age for these plans is usually between 45-55 years.

• Tax benefits under section 80CCC of the IT Act of 1961.

Benefits of Senior Citizen Life Insurance Policies

Apart from providing financial security, senior citizen's insurance policies come with several added benefits like:

• The elderly people feel honored and independent. They do not feel lonely or neglected in their old age, which helps in keeping them healthy, both physically and mentally.

• These policies considerably reduce future financial worries because the policies take care of the elderly population by paying for their various needs.

• These policies offer income tax redemption.

• The policies provide a source of funds for meeting medical expenses, funeral and death expenses, unpaid debts, credit card bills, and personal loans.

• They provide an income stream (annuity) after retirement which acts as social security.

• They help senior citizens in creating a corpus of funds for their family.

Choosing the Plan

A wide variety of senior citizen plans are available in the market, offered by different insurers. Choosing the most-suited plan is a tedious task. Here are a few basic parameters to be evaluated before purchasing a pension policy.

Returns – The return provided is the most important parameter for selecting a particular mode of investment. Choose a plan only after getting a fair idea about the returns it will provide.

Liquidity – Most pension plans have a lock-in period, during which the invested funds cannot be withdrawn. However, some plans offer a certain degree of flexibility regarding withdrawal.

Tax Benefits – Payments made towards insurance premiums can help in saving on tax payments. Choose a pension plan that provides tax exemption not only for the invested amount but also for the amounts to be received as interest or dividend.

Minimum & Maximum Investment Amounts – Different pension plans have different limits pertaining to the minimum and maximum investment amount permitted. Consider this while selecting a policy, keeping your budget in mind.

Additional Benefits – It is better to select a plan that offers the preferable additional benefits, such as life cover, tax advantage, etc

Background check – Compare the various policies available, consider the company's reputation, the claim settlement rate, and the pros and cons of the plans. Keep in mind that seniors citizens often face different and unique challenges and they should have the right policy to meet their needs. Compare costs and benefits before taking a final decision.

Apply for Senior Citizen Insurance Plans

Applying for a senior citizen insurance plan is not that difficult, after finalizing the policy one is going to buy. Customers can apply online if the insurer offers the service or one can contact the insurer for the same and ask them to send a representative to complete the application procedure.

Can People over 80 Years of Age Get Insurance Cover?

Yes, octogenarians can definitely get insurance cover. Life insurance plans for senior citizens have generally been categorized into the following offerings: old age life insurance, over 85 insurance, 65 plus life insurance plans, life insurance for seniors over 70, 50 plus life insurance, etc. However, the availability of the policies largely depends on the state of the applicant's health and age.

Therefore, one must be adept at taking health precautions and maintaining a healthy lifestyle. It is much easier for elderly people to find a satisfactory insurance policy if they have a good health. Moreover, healthier people benefit from lower premiums too. Moreover, one should be a careful shopper and carefully compare the different senior citizen life insurance policies available before purchasing one. One must carefully evaluate the policy terms, the offerings, the coverage, the different premium rates to find the correct policy at the most affordable rate.

Life Insurance Plans for Senior Citizens

Here are a few insurance plans designed specifically for senior citizens:

Reliance Life Super Golden Years Term 10 Senior Citizen Plan

• A systematic investment plan (SIP) to secure your future.

• A flexible unit-linked pension plan.

• Option to choose from 8 different investment funds.

• Option to switch between funds.

• Tax-free commutation up to one-third of the fund value.

• Flexible premium payment options available - regular, single and top-up

Kotak Lifetime Income Plan

• A non-linked, non-participating immediate annuity plan.

• Steady income throughout life.

• Option to choose from 6 annuity options.

• Higher annuity rates for a higher purchase price.

• Available to individual customers as well as members of a superannuation fund

• Option to purchase an additional annuity for getting a higher annuity payout.

Max Life Guaranteed Lifetime Income Plan

• Guaranteed income for the policyholder's entire lifetime.

• Option to select between single or joint life annuity options. (the joint option enables the spouse to receive the payouts after the policyholder expires).

• If the policyholder expires, the nominee receives the purchase price of the policy, excluding taxes, levies, and cesses.

• Flexibility to choose to the payout frequency - annual, semi-annual, quarterly or monthly