 "Never too late to buy a term life insurance")
Today, if you want to buy a term plan online, you can do so till the age of 60 years or more-something very difficult to do only a few years back. The coverage will be given till the age of 75 years to 80 years. No wonder, a number of elderly citizens are buying term plans though they are a tad expensive.
"With economic growth, incomes have gone up multiple times but expenses have also increased due to discretionary spending. In addition, there is no social security in India. So, many people take up second jobs after retirement, says Sudipto Roy, managing director, Principal Retirement Advisors. And, that income needs protection. Hence, term plans.
Another reason why people are buying these products is due to liabilities and dependants. "The typical profile of people seeking such a cover is that they either have kids who are financially dependent on them or have liabilities and unpaid debts," says Yashish Dahiya chief executive officer and co-founder, PolicyBazaar.com, an online insurance aggregator.
Even if there aren't regular nine to five jobs, many seek part-time jobs such as consultants after-retirement, says Neeti Sharma, vice-president at Teamlease. "Experts such as banking professionals might work with a financial services start-up or a tax expert as a consultant on an hourly basis. Remuneration can be Rs 2,500-3,000 per hour and people can hope to make as much as 60-65 per cent of their last salary,'' she says.
Not long before term insurance cover was only provided till the age of 55. After insurance companies came up with an online term plan for the higher age band, it all changed. Today, there are many more insurers providing coverage to persons up to the age of 75. The online platform's easy reach, convenience and affordability have made the consumer a winner, with the widest of choices, says Amit Roy, chief distribution officer, Aegon Life Insurance.
"Customers who buy online term plans are more tech-savvy and look at it as pure risk cover. They may have purchased endowment and other investment plans early on in their lives but now realise the importance of a pure risk cover," says Roy.
Earlier, the demand from older customers for term life insurance was restricted largely to metro cities, such as Mumbai, Delhi and Bengaluru. Now there is good demand from other cities, too. In finance companies, armed also with better actuarial data, are willing to give protection to senior citizens. Aegon currently offers coverage till the age of 75 and plans to increase it to 80 years. "Even after retiring at, say, 60, people have 10-15 active years, which leads to the requirement of income protection'' says Roy.
In April, Aegon's Annual Retirement Readiness Survey spoke about the steps being taken around the world to promote the concept of flexible retirement. The survey was conducted in 15 countries, including India. "Life expectancy is increasing around the world. From 1970 to 2012, life expectancy at birth increased 11.1 years for men and 12.1 years for women. As people live longer, their ability to work in older age increases. "People should no longer be limited by the notion of retiring fully at age 60 or 65," the survey said.
According to the survey, life expectancy in India is expected to rise to age 73 in 2050, up from 66 today, which will challenge the sustainability of the country's retirement system.
WHEN SHOULD YOU BUY A TERM PLAN EVEN IF YOU ARE OVER 50?
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If you are the sole earning member and have a wife and children who are financially dependent on you
- If you have liabilities like a home loan, which need to be taken care of in case you die. In the absence of adequate insurance, the onus of repayment could fall on your dependants
