Not many insurers offer term cover to those over 60

Published in Mint on, May 28 2013, Written By Kapil Mehta

Are there life insurance policies for someone above the age of 60? How can I get it? I want to get a policy as my granddaughter is dependant on me.
—Kajal

Life insurance to take care of your grandchild is a lovely legacy to leave. You could purchase term insurance that will pay your granddaughter a large sum of money if you die during the policy term.
Unfortunately only a few insurers offer term cover to people over the age of 60. I scanned the term products of 15 leading life insurers and found that only five of these will offer a term cover to people over 60.
One of these five insurers will terminate the policy when you turn 70, three when you turn 75 and one when you turn 80. I recommend longer covers that last until age 75 or 80. Around Rs.50 lakh of sum assured for a 62-year-old person until age 75 will cost about Rs.75,000 per annum.
Another important consideration is to ensure that the money you leave behind for your granddaughter is wisely invested and lasts her until she is financially independent. There are many financial products that can help you meet that objective.
From a life insurance perspective, you can evaluate buying a unit-linked plan with a waiver of premium rider. The waiver of premium rider is extremely useful because it ensures that if you die, the insurer continues to contribute premiums into a fund for your grandchild. Select a policy term that matures on your granddaughter’s important milestones years—when she turns 18 or 21.

I am 25 years old and I have just got a job. It is in Hong Kong. I want to buy a life cover before I leave for Hong Kong. Could you tell me if I should buy it here or over there? Are life insurance products valid across countries?
—Priyanka Kedia

If you are not permanently relocating to Hong Kong, buy a term cover in India. This has several advantages: Indian insurance rates are competitive and low, your insurance can continue even if you move to other countries later on and you can get insurance-related tax benefits in your Indian tax return.
Opt for an electronic clearing service payment option so that renewal takes place automatically even if you are not in India. Insurance policies are valid across countries and your nominees will get paid even if you were to die overseas.

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