Do I need Life Insurance after retirement?
November 28, 2019
Income replacement is one of the biggest reasons why breadwinners in the family consider purchasing life insurance. But do you still need one after you retire and stop earning? Read this post to find out.
People purchase life insurance to insure their life. Through an insurance plan, they try to make sure that their family members do not have to suffer from financial hardships in case of their unexpected demise. So, it is not wrong to say that life insurance is purchased by people to make sure that their family receives some sort of financial assistance to make up for the loss of their regular income after their demise.
A common question then arises - whether you need life insurance after retirement as you do not earn a regular income anymore? While the answer surely varies from person to person, having life insurance even after retirement is generally considered a wise decision. Here are four different ways in which life insurance can help you and your family in your retirement years:
1. Financial support for family
You might already be in the age group of 50-60 years if you are planning to retire soon or have taken retirement. Your kids too may have grown up by now and have professional and personal lives of their own. For your spouse, you might have adequate savings and investments in retirement plans.
So, while your family members may not be directly relying on you for their finances, the assured sum of the life insurance policy, in case of your demise, is sure to strengthen the financial life of your family members further.
2. Achieving financial goals
There are now many different types of life insurance with retirement plans like Unit Linked Insurance Plans (ULIPs) and guaranteed returns plans. With such policies, your beneficiary will receive the death benefit in case of your demise.
But if at all you survive the policy duration, you will receive a maturity amount as per the terms and conditions of the purchased policy. So, if there are financial goals that you are yet to achieve in life, a life insurance plan can definitely help in this endeavour.
3. Repay loans
An increasing number of people continue repaying their loans like Home Loans even after retirement. Rather than using your savings to repay current loans, a life insurance plan can be a smart option.
With options like endowment plans and ULIPs, you cannot only inculcate a habit of saving but also earn handsome returns on your investment. The returns from such life plans can be used for closing the loans sooner, so that you enjoy debt-free retirement years.
4. Manage unexpected expenses
From medical emergencies to house repairs, there can be several unexpected expenses after retirement. Rather than using your savings or money from your retirement plans, you can use life insurance plans to pay for such expenses.
With insurance plans like ULIPs, you are allowed to withdraw your investment after a fixed lock-in period. This facility can be used for managing such financial emergencies.
Life Insurance and retirement
As you can see, several reasons make life insurance a smart choice, even in your retirement years.
At the time of purchasing the policy, make sure that you thoroughly understand the different types of policies available. This will allow you to select a policy that best suits your requirements and offers maximum pre and post-retirement benefits.
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