Few insurance companies in India offer life insurance policies that provide cover up to the age of 100. This is often marketed to appeal to those individuals who worry that if they outlive their policy term, the premiums paid by them will be wasted. They believe that with such an extended term, the policy is more likely to eventually result in a claim, since the average life expectancy in India is under 70 years, and their family will benefit. "Benefits include insurance coverage for a lifetime. This takes care of the anxieties with respect to the well-being of the family post-demise, even in old age. Sometimes these kinds of plans help create an estate for the survivors," says Gaurav Goel, an entrepreneur and Sebi-registered investment advisor.
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Why You Do Not Need Life Insurance Till You Are 100
However, in most cases, it's neither necessary nor financially prudent to extend coverage beyond age 70 or, at most, 80. The core purpose of life insurance is to support dependents financially or to ensure any outstanding liabilities can be settled after the policyholder's death, through insurance claims.
"Opting for coverage till the age of 100 may significantly increase the premium, which can become burdensome, especially post-retirement, when income is often limited. Therefore, such long-term coverage may not be an advisable option for most people," says Deepak Kumar Jain, founder and CEO, TaxManager.in, the tax advisory and e-filing portal platform.
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What To Consider
Those policies with coverage to 100 could make sense for a few people whose goal is to leave a certain inheritance guaranteed, or who have unique estate-planning needs. They're also useful for individuals who have dependent children for life, such as a child with special needs. "Some may want a permanent policy for peace of mind, but most young earners will benefit more from a term plan that covers their working years by quite some distance and then investing the difference elsewhere," says Kunal Varma, CEO and founder, Freo.
Consider your financial goals, your dependents, and your liquidity needs. Ask yourself: Do I really need coverage beyond 70 or 80? Is the premium going to weigh down other priorities, such as education, retirement, emergencies, etc.? "Also, examine the flexibility of the policy - even the easiest policy to get out of has caveats, so can you cash out early if you need to, get a loan, or change your sum assured? At a later date? Committing to a rigid or too expensive plan can bring up feelings of buyer's remorse down the road," says Varma.
