- February 10, 2022
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.
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.
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.
Recently, a 60-year-old doctor from Hyderabad bought a term plan worth Rs 1 crore for 15-year coverage at a single premium of Rs 8 lakh. The 50-plus age category comprised merely one per cent of life term plans on the platform in FY 15. This number went up to nearly five per cent in FY16, according to data from Policybazaar.com.
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.
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.