Maximum Renewal Age

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Definition:

The maximum age to which a life insurance policy can be renewed to keep the policy active is called the maximum renewal age.

Description:

Age is just a number but in several situations it defines your eligibility. Like you can vote in India only after 18. If you want to drive a vehicle, you need to get a licence and that can be done only after you are 18.  

Age indicates your state of health and mental ability to function properly. Buying life insurance as the policyholder is also possible only when you are an adult.

As the person grows, the earning capacity may increase. But as the person approaches retirement, the active income may stop. This can affect the premium paying capacity; hence the insurance company puts a capping on the renewal age. The last age until you can renew the life insurance policy is the maximum renewal age.

Example:

Rohit was 50 years old and was employed in a bank. He wanted to buy a term plan for his family’s security. Rohit’s son, Lalit aged 28 years who was married and was expecting a  baby in the family. Lalit also wanted to buy a term plan to keep the family secured in his absence.

Both of them wanted to buy a life insurance policy. So they requested a life insurance policy. After checking the eligibility, both realised that only Lalit could get a policy term for a longer duration, but Rohit will get it for 10 years only. It is because the term plan's maximum renewal age is only 60 years. Rohit was 50 when he purchased the policy and the renewal age allowed was 60. Hence, the policy term for him would be 10 years only.