Age not a limitation for getting life Insurance covers

Some life insurance companies offer protection to policyholders till they attain 75 years Bharti Axa offers the maximum tenure of 50 years to a 25-year-old person by charging Rs 16,517 per year Term insurance is the most basic income protection plan that one can buy from a life insurance company Insurance players are allowing their policyholders to continue their policy for tenure of 30 years

IT MAY come as a pleasant surprise, but, there several some life insurance companies that offer insurance protection that extends for the 70-plus age group. An analysis done by FC Research Bureau on life cover offered by term plans of a random set of nine insurers revealed five insurers that offer insurance protection to policyholders till they attained 75 years of age.

Sample size: The insurance companies that were considered in this analysis are, Aegon Religare Life Insurance, Aviva Life Insurance, Bajaj Allianz Life Insurance, Bharti Axa Life Insurance, Birla Sun Life Insurance, HDFC Standard Life Insurance, ICICI Prudential Life Insurance, Kotak Mahindra Old Mutual Life Insurance and Max New York Life Insurance.

In the analysis, we had considered the maximum tenure that can be chosen by an individual policyholder. Out the sample of nine insurance players, Bharti Axa Life Insurance offers the maximum tenure of 57 years and Aviva Life offers a maximum tenure of 52 years. This also means that an individual of any age can continue his policy till he is 75 years and 70 years old, respectively.

Value proposition of term insurance: Term insurance is the most basic income protection insurance plan that one can buy from a life insurance company. The condition of a term insurance plan is very basic and the insurance company pays the total sum insured under the term plan to the family of insured person in case the insured dies within the policy tenure.

Insurers are allowing their policyholders to continue their policy for a tenure of 30 years. A longer tenure implies that the policyholder will be covered for a longer period. Also, since the premiums are fixed at the time of buying a term insurance policy, the policyholder will be able to continue the same plan till he is 70 or 75 years old by paying a fixed amount.

Analysis revealed that as many as three insurance players out of a sample of nine insurers offer term plans for an annual premium of Rs 6,685 for a 25year-old man with sum insured of 50 lakh. Out of these three, two insurers offer the policy for a tenure of 30 years, while Aviva Life Insurance offers the policy for a tenure of 45 years, which means the individual can continue the policy till he is 70 years.

Bharti Axa Life is offering a maximum tenure of 50 years to a 25-year-old individual by charging an annual premium of Rs 16,517.

Aviva Life on the other hand, which coves the 25year-old policyholder for tenure of 45 years, charges an annual premium of Rs 6,685. Other insurers, such as Bajaj Allianz Life charges an annual premium of Rs 6,423 for a 30-year term policy and ICICI Prudential charges Rs 6,685 for a 30year term policy.

If a policyholder chooses a term plan at an early age, he will not only get lower premium policy, but also, benefit because the chances of him of having any disease is also lower at that age. At an older age, of say 40 or 45 years, chances of having a life style related medical condition like high blood pressure or diabetes go up, which will increase policy premium.

As per the analysis, Bharti Axa Life charges a total premium of around Rs 8,25,000 during 50 years of policy tenure, while Aviva Life charges around Rs 3,00,000 for a 45-year tenure and Bajaj Allianz Life charges around Rs 1,90,000 for a 30-year tenure. Although, there is a significant difference in the premiums being charged, it should be noted that a term plan with a tenure of 50 years would cover the individual when he is 75 year old, at which time, the risk is the highest.

For a 40-year-old man, the maximum tenure that is available is 35 years from Bharti Axa Life. This will ensure that the policy will be renewed till the policyholder attains 75 years of age.

Although, Aegon Religare Life, Birla Sun Life, Max New York Life and ICICI Prudential offer policies for a maximum age of 75 years, but, because these insurers only have a maximum tenure of 30 years, a 40 year old can renew his policy only till he attains 70 years of age.

Premiums charged: The annual premium for Bharti Axa Life's 50 lakh sum insured term plan is Rs 31,686.

While most other insurance companies allow a maximum tenure of 30 years to a 40-year-old individual, HDFC Standard Life offers a tenure of only 25 years with an annual premium of Rs 21,945.

Life cover of term insurance plans is based on annual income, occupation, health condition and age.

Since there is significant change in healthcare and mortality, most insurance players are now covering their policyholders till they are 70 years old.

For a 50-year-old individual, most insurance companies offer a maximum tenure of 25 years, while Bajaj Allianz Life, Aviva Life and Kotak Mahindra allow a maximum tenure of 20 years. HDFC Standard Life allows a tenure of only 15 years for new policyholders.

Online and offline term plans: Typically, term policies, which are purchased online, can be bought in the multiples of five. For example, one can choose a policy for 10 years, 15 years, 20 years, 25 years and so on, while offline policies may be bought for any tenure.

IDBI Federal Life Insurance has recently launched a term insurance policy that is available to people who are in the age bracket of 50-85 years. As the age of a person keeps increasing, he finds it difficult to find a term plan in the market. Our term plan is quite unique in that aspect as people who are over 70 years old will also be able to buy term plans.