Term Insurance 8259 views December 31, 2019

Best Term Insurance Plan After 50

Term insurance is commonly bought by young people who like to cover their lives at an affordable rate. Term insurance keeps getting more and more expensive as the policyholder ages. This is because the life risk also rises with age. It is not, however, unusual to see people buying term insurance at the age of 50 years. In fact, the best term insurance plan after 50 has many features and benefits. Let us learn more about this in the article below.

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Reasons to Buy the Best Term Insurance Plan After 50

Here are some reasons why people buy term insurance plan after the age of 50:

  1. For Dependent Family Members: It is a common trend for people these days to focus on their careers and start a family later. As a result, many 50-year-olds have young children who fully depend on them. A term cover is therefore needed to ensure the policyholder’s children and other family members remain financially secured.
  2. For Spouse’s Wellbeing: If the policyholder had kids early on in life and they moved away to be on their own, he may have a dependent spouse who needs the financial protection of a life insurance plan. At such a time, getting the best term insurance plan after 50 is a very good idea.
  3. To Cover Loans: If the policyholder is nearing his retirement or his health is fragile and he still has multiple open loans to clear, he definitely needs to invest in a good term insurance cover. If something happens to him at this stage, his family can use the death benefit to clear his loans easily.
  4. To Save Tax: And finally, a person can save a lot of tax money by paying a term insurance premium every year. Deductions up to Rs 1.5 lacs are permitted each year under Section 80 C.

If you have any such reason do get a good term plan without any further delay. Thankfully, most of the term insurance plans in India have an entry age of 65 years. You can, therefore, find many options to choose from.

The Best Term Insurance Plan After 50

Here are some of the top term plans for you to consider when you are 50 years of age or older:

  1. HDFC Life Click2Protect Life
  2. Bharti AXA Life Flexi Term
  3. Aviva i-Life Total
  4. IDBI iSurance Flexi Term
  5. Aegon Life Term Insurance

Let’s discuss these plans below and see which one meets your purpose the best way.

HDFC Life Click2Protect Life

This HDFC Term Insurance Plan comes in three variants –

  • Life Protect Option
  • Life & CI Rebalance Option
  • Income Plus Option

Life Protect Option

The following benefits are applicable to the plan option. 

Death Benefit – If the life assured dies during the policy term, the higher of the sum assured on death and 105% of total premiums paid will be payable to the nominee. In case you’ve chosen the Single Premium plan, the highest of 125% of single premium, sum assured on maturity and basic sum assured will be paid to your nominee. The highest of 10 times the annualized premium, sum assured on maturity and basic sum assured will be payable to the nominees of people choosing Regular Pay and Limited Pay options.

Maturity Benefit – This will come only when you have the Return of Premium feature to the plan. If that remains the case, the total premiums paid will be returned to you in case you survive till maturity.

Life & CI Rebalance Option

The basic sum assured chosen under the option will be divided between life cover and critical illness. While life cover is set at 80% of the basic sum assured, the remaining 20% will be towards critical illness at the beginning. Critical illness sum assured will increase and life cover will decrease at each policy anniversary starting from the first policy anniversary.

Death Benefit – If the life assured dies during the policy term, the highest of Sum Assured on Death, 105% of Total Premiums Paid and Life Cover Sum Assured will be payable to your nominee. In case of single premium plans, the higher of 125% of single premium and sum assured on maturity will be paid to the nominee. The higher of 10 times the annualized premium and sum assured on maturity will be payable in case of regular pay and limited pay options upon the death of the life assured.

Maturity Benefit – This will apply only if you have the Return of Premium feature to the plan. In such a case, the total premiums paid will be returned to you in case you survive till maturity.

Critical Illness Cover – If any of the covered critical illnesses are diagnosed during the policy term, the sum assured applicable to the same will be payable.

Income Plus Option

It comes with a life cover, regular income from age 60 onward and maturity payout.

Death Benefit – The higher of Sum Assured on Death and 105% of Total Premiums Paid will be paid less than the survival benefit paid till the date of death. For single premium plans, the sum assured on death remains the highest of 125% of Single Premium, Sum Assured on Maturity and Basic Sum Assured. In case you choose either a regular pay or limited pay, the sum assured on death will be the highest of the following –

  • 10 times the annualized premium
  • Sum assured on maturity
  • Basic sum assured

Survival Benefit – If you survive during the policy term, you will receive a survival benefit at the end of every month following the policy anniversary after 60 years of age. The survival benefit amounts to 0.1% of the basic sum assured.

Maturity Benefit – The benefit will depend on the period of the plan. If it is a fixed term plan, the sum assured on maturity up to 110% of the total premiums paid less the payment of survival benefit will be handed to you. In the case of Whole Life Plan, there are no maturity benefits.

Bharti AXA Flexi Term Plan

It’s also an exciting term plan with a wide range of benefits for policyholders and their nominees. Let’s check out its benefits.

Death Benefit – If the life assured dies during the policy term, your nominee will receive a payout, which remains the highest of the following –

  • 10 times the annualized premium
  • 105% of the total premiums paid till the date of death
  • Base sum assured

Now that death benefit will come in any of the three ways – Lump sum, Monthly Income and Lump sum Plus Monthly Income – that you choose at policy inception.

Lump Sum – It is defined by the name itself- the whole amount is paid to your nominee in one big sum.

Monthly Income – The monthly income is payable for 15 years and increases every year at 10%.

Lump Sum Plus Monthly Income – Here, 50% of the death benefit payout will happen in a lump sum and the remaining in monthly income for 15 years increasing at 10%.

Optional Critical Illness Benefit – The plan comes with two critical illness benefit options – Comprehensive Cover and Major Illness Cover. If you choose Comprehensive Cover, as many as 34 critical illnesses will be covered. Whereas under the Major Illness Cover, the company will pay for 15 critical illnesses.

Aviva i-Life Total

Like the previous two term plans, Aviva i-Life Total also comes in multiple variants namely – Protect, Protect Plus, Protect Assured and Protect Income – meeting different needs of people aged above 50.  Let’s talk about these variants.

Protect – This life cover variant pays 50% of the chosen sum assured variant upfront in case of a terminal illness. People with more than 50 years of age can be more susceptible to such illnesses. So, having such a bulk amount upon such an instance makes sense for people aged above 50.

Protect Plus – It will provide financial protection to the dependents of the life assured upon his/her death, besides double the coverage in case he/she dies due to an accident.

Protect Assured – It pays the nominee of the life assured in case he/she dies during the policy term. In case the life assured survives till maturity, 120% of the premiums paid till that time will be returned to him/her.

Protect Income – With this variant, you can secure the monthly income of your family in your absence at an annual increment of 5%.

IDBI Federal iSurance Flexi Term Plan

This plan secures your family financially against death, terminal illness and even accidental death through the following payouts.

Lump Sum with Conversion Option – If you choose this option, a lump sum amount will be paid upon death or specified terminal medical conditions.

Fixed Monthly Income Benefit – This option ensures the payment of monthly income to your family for 15 years upon your death.

Lump Sum + Fixed Monthly Income Benefit – Your family will receive the payout in two parts upon your death – a lump sum amount and a fixed monthly income for 15 years.

Lump Sum + Increasing Monthly Income Benefit – This is much like the above-mentioned part, except that the monthly income will increase by 7.50% each year.

Points to Remember Before You Buy the Best Term Insurance Plan After 50

Here are some important points to keep in mind before you buy a term plan at age 50:

  1. Premium is High: As stated, the term insurance premiums rise as the applicant’s age rises. So when you buy your term insurance cover at 50 years of age, you should be prepared to pay a higher premium than a 30-year-old man who has the same cover. This is a valid point and you cannot negotiate with the insurer to reduce the premium rates in any way.
  2. Health Plays a Role: In any form of life insurance, the applicant’s health plays an important role. If you are healthy and fit, your term insurance premium will be lower. If your health is not too good, you will be charged a higher premium. This happens because the insurer associates a higher risk with someone who has pre-existing illnesses or a faulty lifestyle. Unfortunately, by the age of 50, most people develop some ailments that affect their overall health. Be honest about your health conditions when buying term insurance to get proper coverage.
  3. Tenure is Shorter: If the term insurance plan is bought at the age of 25 years, the policyholder will get to stay covered for 50 or 60 years. But when the plan is bought at the age of 50, the coverage tenure becomes shorter. You can get the plan for perhaps 20 years or so. That is alright, as long as you get to stay covered for a suitable time and ensure protection to your loved ones.
  4. It Helps to Compare: Never buying a term insurance plan without comparing. Comparing helps you to locate the best plan at the best possible price. It hardly takes a few minutes to compare so go ahead and run the comparison before you finalise on a term insurance cover.

To Wrap it Up

Ideally, you should get term life insurance as early on in life as possible. But if you are unable to do so for some reason and need life insurance when you are around 50 years old, go for the best term insurance plan after 50. As mentioned above, you will find many good options to select from. Just keep the important factors in mind and choose wisely. You will then have the best plan at the best rate for sure.

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