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Have you ever wondered how you can secure a comfortable life after retirement, especially when you are 65 or older? This is where a life insurance plan can play a pivotal role, as it offers a solution to financial constraints and provides the peace of mind you deserve.

Life insurance for 65 and older provides financial protection for your loved ones and assists in creating a substantial financial corpus to meet long-term goals.

Let's delve into the key aspects of life insurance plans for above 65 to help you make a well-informed decision.

Why is Life Insurance for Over 65 Required?

A life insurance policy is a crucial investment for those over 65, as it ensures that one’s loved ones remain financially secure in case of an unforeseen event leading to the policyholder's death.

Apart from the death benefit, the policy can also provide maturity and survival benefits that contribute to maintaining your quality of life even after the cessation of regular income. It offers financial stability to your spouse for a comfortable post-retirement life as well. Additionally, you can also use the cash payout from the insurance plan to pay off outstanding debts, such as home loans and medical bills, and reduce your financial stress.

Benefits of Life Insurance for 65 and Older

Investing in life insurance plans for above 65 can yield significant benefits such as the following -

  1. Provides Financial Security for Your Loved Ones: One of the primary advantages of life insurance is the financial protection that it offers to your family. In case of the policyholder’s death, the dependents will receive a death benefit which can help them cover their living expenses and maintain their lifestyle.
  2. Preserves Your Current Lifestyle After Retirement: The survival and maturity benefits provided by some life insurance policies can serve as a reliable source of income during your retirement years. This income can help you maintain your current lifestyle even after your regular income ceases.
  3. Provides Comfortable Life for Your Spouse Post-retirement: A life insurance policy can ensure that the policyholder’s spouse remains financially stable even in the former’s absence by providing them with resources for a comfortable life post-retirement.
  4. Offers a Lump Sum Payout for Debt Clearance: Any outstanding debts such as a mortgage, car loan, or medical bills can be a huge burden for your loved ones. The death benefit from one’s life insurance policy can be used to pay off these debts, relieving the family of this financial responsibility.
  5. Provides Peace of Mind: Knowing that the financial responsibilities will be taken care of even in case of any unfortunate circumstances can provide immense peace of mind to both you and your family.
  6. Can be a Source of Funds for Unexpected Medical Expenses: Some life insurance policies include options for accelerated death benefits, which allow you to receive a portion of the death benefit while you are still alive if you become critically ill.

Factors Affecting Life Insurance Premiums for the Senior Citizens for 65 and Older

Insurance companies consider several factors when determining the premium for life insurance for over 65-

  • Age: Age is a primary factor considered by insurance providers when determining premium rates. As the risk of health issues increases with age, older individuals are often required to pay higher premiums.
  • Lifestyle Choices: Lifestyle habits such as smoking or excessive alcohol consumption are viewed as high-risk behaviours by insurance providers. These can result in higher premium rates as they increase the likelihood of health problems.
  • Health: Your current health status can greatly influence your life insurance premium - chronic diseases or serious health issues may result in higher premiums. Some insurance providers may even deny coverage based on certain health conditions.
  • Family Medical History: Insurers also consider your family's medical history while calculating premiums. If there is a history of genetic diseases or health issues like heart disease or cancer, you may face higher premiums as these conditions are often hereditary.
  • Coverage Length and Amount: The duration and amount of coverage can significantly impact the premium. Longer policy terms and larger coverage amounts typically mean higher premiums as they increase the insurer's liability.
  • Other Factors: Other elements such as gender, occupation, and personal hobbies can also affect premiums. For instance, men often pay higher premiums than women due to shorter life expectancy, while risky jobs or hobbies can lead to increased premiums due to a higher risk of injury or death.

How to Choose Life Insurance for Over 65?

Choosing a life insurance policy for 65 and older requires careful consideration of several factors on your part -

1.) Medical Examination

When choosing a life insurance policy, consider whether you are willing and able to undergo a medical examination. Some insurance companies require a full health checkup to evaluate your overall health and risk level. However, you can also find plans known as no-exam life insurance policies. These are often more expensive but can be a good option if you have serious health conditions or want to avoid the inconvenience of a medical exam.

2.) Policy Term

The term of the policy is another important consideration. The coverage period for life insurance policies tends to be shorter for individuals over 65. It's important to choose a term that best aligns with your needs.

For instance, you may only need coverage until a certain debt is paid off, or you might want a policy that lasts for the rest of your life.

3.) Premium Rate

Consider your budget and how often you want to make payments. Some policies offer flexible payment schedules, allowing you to choose between monthly, quarterly, or annual payments. 

Another point to check is whether the premium is fixed or could increase over time. A policy with a fixed premium might be more beneficial, as the rate won't increase as you age or if your health conditions change.

4.) Insurance Coverage

The amount of coverage or death benefit that you choose should be adequate to meet your family's financial needs. This could include providing income for a surviving spouse, covering outstanding debts, or paying for end-of-life expenses. It's crucial to calculate this figure accurately to avoid over or under-insuring.

5.)  Rider Benefits

Insurance riders are optional additions to customise your policy to suit your specific requirements. For instance, one can add an accidental death rider that provides an additional payout if the policyholder dies in an accident. A critical illness rider, on the other hand, allows you to access a portion of the death benefit if you're diagnosed with a specified serious illness. Yet another option is the income rider, which could provide a regular stream of income during your retirement.

All these riders add to the cost of the policy but can provide valuable additional coverage.

Pro Tip: When choosing life insurance over 65, it's crucial to thoroughly research and compare different insurance providers and plans to get the best plan at affordable rates. Consider working with a financial advisor who can guide you based on your personal situation.

Bottom Line

Life insurance for 65 and older serves as a financial safety net so that your golden years are worry-free and your loved ones are well protected. By considering factors like premium rates, policy terms, coverage, and rider benefits, you can find the best life insurance for over 65 to fit your requirements.

Remember, securing a life insurance policy is not just about preparing for the inevitable but also about enjoying peace of mind today, knowing that your family’s financial future is secure.

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