An Insurance Policy that Covers You Till 99 Years

Written by : Knowledge Centre Team

2020-12-29

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For many years, people had few options for securing the future of their retirement phase or their families. Today, on the other hand, there are hundreds of options provided by the numerous banks available to the average Indian – so many that the problem is choosing the right kind of plan for you and your family.

The need for life insurance, especially for the primary breadwinner of the family, is obvious. If there is an untimely demise of the person who supports the family financially, other members may have to scramble to survive. To make sure that the family is supported in such an unfortunate incident, at least until another person can secure a well-paying job, many people go for an insurance policy that will guarantee that a specific death benefit will be paid to their choice of nominee after their demise. This assurance goes a long way in helping your family maintain their quality life even after you are gone.

The diversification of the target demographic and the insurance market's growth has resulted in the necessity for new insurance plans. For example, the limited-term insurance plan allows its customers to pay off all their premiums in a short period, preferably at the peak of their career when they can afford to set aside the premium money.

Similarly, banks are beginning to offer a kind of term insurance plan with assured coverage for almost a hundred years.

Why Would You Need a Hundred Years of Coverage?

Why would you not want a term insurance plan that extends to almost a hundred years to rephrase the question? Your family's financial burdens will be cushioned for a more extended period. After achieving economic equilibrium, they may even think about investing the monthly allowance they get from the insurance company for maximized returns.

Even your family has to deal with additional costs. In the case of educating your children abroad, inflation leading to higher household expenses, the need to invest in expensive appliances or hardware, or the marriage of a family member, a hundred years of coverage will ensure that there is a stable influx of income no matter what, for as long as it lasts.

What exactly does a Whole Life Term Insurance Plan Entail?

A whole life term insurance plan guarantees your nominees' financial protection and, by extension, your entire family. Unlike an ordinary term insurance plan, these plans will extend up to 99 years (which effectively is a century). This is the longest possible term you can acquire as a shield for your beneficiary parties.

The 99-year term insurance plan will be applicable until you reach the age of ninety-nine. Effectively, if you take up this plan when you reach fifty, your policy will give you forty-nine years of protection. This can easily cover expenses until your kids reach the age where they can support themselves.

People worldwide realize that no savings will suffice, even after they reach their age of retirement. Ordinary retirement plans and insurance premiums are merely becoming insufficient with the rising expenses of living and the accelerating inflation rates plaguing the global economy. This is why people want financial protection that covers them and their families for years ahead.

With the current pandemic scenario that takes no prisoners, early death is more likely than ever, even for healthy and at his or her prime. People also realize that the assets that they may invest in today – stocks, real estate, property, etc. – may not be sufficient to support their children in the future since the world is changing culturally and economically at a faster rate than ever.

Going for a whole life term insurance will minimize all of these hurdles for your children. Past the retirement age of sixty to seventy-five, your family will be provided with a monthly installment that will cover your needs according to the estimates.

How Does a Whole Life Term Insurance Plan Work?

Like any other term insurance plan, the hundred years plan extends to a particular time, in this case, until you reach 99 years of age (even if you die before that age). The policyholder will pay an insurance premium every month – this is usually an affordable amount that the policyholder can choose, based on their current economic standing.

This compounded amount will be paid to the nominee towards the end of the plan. If and when you pass away before the culmination of the plan (which is highly likely since the overall life expectancy in India’s now 68, despite a significant increase in the past decade (source)), the beneficiary would be provided with a guaranteed amount of money.

What are the Benefits of a Whole Term Insurance Plan?

There are several benefits to the 99 years plan:

1. You can rest assured that your family will be taken care of, even more than when you avail of a standard insurance plan. This is one of the most efficient and robust insurances an average middle-class citizen can afford today – your family will survive and thrive in your absence, especially if you can train them to invest the death benefit sum efficiently. The nominee will receive the lump sum after the policyholder's death, which can take care of the immediate expenses like the funeral and rent, education, and household maintenance for a few months until someone else in the family secures a job.

2. The affordability factor is relatively high in the case of a ninety-year plan. There is a high level of customizability that comes with these plans. You can determine the amount you want to leave behind as insurance for your family after evaluating your households' needs. Considering additional costs like marriage expenses, education fees, etc., as well as financial factors like inflation, you can decide the level of coverage you need. If your family leads a minimalist life and can survive on smaller sums of money, or if your spouse or children are already earning members, you can quickly settle for a smaller coverage.

The affordability factor also comes into play when you look at the highly flexible options for the frequency of payment of the premium. This can be monthly, quarterly, or annual, depending on the stability of your pay. If you work in a field like business or in the entertainment industry where their income is sporadic and come in spurts of large amounts, the yearly plan will be beneficial for you. Transferring a large chunk of your income once a year will ensure that your family is well off after you are gone. The 99-year plan, therefore, suits almost every profession out there due to its high customizability.

1. Another advantage is the term insurance tax benefit applicable according to the Income Tax Act, 1961. This allows for maximum returns since deductions are allowed on the regular premium payments. There is also an exemption on the death benefit received by the nominee – the entire sum of money along with the bonus belongs entirely to the beneficiary, and they will not be taxed for the same. The deductions can go up to a limit of Rs. 1.5 Lakh, and can be deducted from the taxable yearly income.

2. Most 99 year plans also provide optional riders that can extend the already long cover. These extensions or riders are added to the base coverage term, taking into account certain events' possibilities. For instance, if you die before you complete a certain number of premiums, the accidental death benefit can be covered by an additional payment so that the possibility of untimely death by accident is covered. This amount will be paid to your beneficiary apart from the assured sum. There are many such riders available – for partial or total disability resulting from an accident, the onset of critical illness or a waiver of premium benefit can all be added to your plan for more exhaustive coverage.

3. Some of the life insurance term plans will provide cover for critical illnesses. The financial toll that an illness like cancer may take can be hard on your family. Expensive procedures like chemotherapy and dialysis may eat your savings, and diseases like this can occur to anyone in your family at any age. But please keep in mind that while the payment may come through, term plans may not cover your death due to specific reasons:

Natural disasters like earthquakes, floods etc.
Death due to a terrorist attack
Untimely accidental death that has not been covered by a rider
Death due to an undisclosed habit – such as smoking, drinking, diabetes etc.
Death outside of national borders.
Death due to terminal diseases.
Death due to critical illness – please take a rider once you are diagnosed with any terminal illness.

An excellent option for a 99 year plan would be the Canara HSBC Bank offers a Smart Lifelong Plan covering you for ninety nine years with added benefits like loyalty benefits, investment fund options and the option for partial withdrawal. Here are the details:

In conclusion, whole term life insurances have their advantages. Still, you should ensure that you take proper care of yourself and disclose your habits and health details to the insurance company beforehand.