While many individuals might think that insurance is no longer required after retirement, there can be many reasons to stay invested in life insurance even in your retirement years. Keep reading.
It is often heard that life insurance should be a part of your personal finances because
- They can be a risk-free way to prepare a retirement corpus for your old age.
- Some plans can ensure you a regular pension after you retire.
- These plans ensure the financial stability of your family when you are no longer around.
While these points are valid for investing in life insurance, people can develop a false notion of not requiring insurance in their retirement years. Not having a regular income can further strengthen this belief.
However, it can be wise to consider having life insurance in your retirement because of various reasons.
- Life Expectancy
Thanks to the advancements in the field of medical science and increased health awareness, the average life expectancy has increased, and it is expected to grow further in the coming years. Therefore, staying insured can ensure better financial stability for your dependent.
- Strengthening Family Finances
While your family may not be financially dependent on you during your retirement, the sum assured of your life insurance policy can strengthen your family finances in your absence. This can be a parting gift to the next generation.
- Reinvestment to Address Unfulfilled Financial Goals
Aspirations never retire, or at least they shouldn’t. You may have some unfulfilled financial goals that you were apprehensive about during your working days.
For example, you might be completely risk-averse during your youth, but now with lesser responsibilities on your shoulders, you can venture into ULIPs to taste the volatile waters of the stock market.
Moreover, you don’t need to touch your main retirement corpus to fulfil such goals. You can use the maturity benefits from your previous policies to invest in such plans and keep working on generating wealth for your family and dependents.
- Loan Repayment
While it is advisable to repay all your loans before you retire, it might not be possible due to some unavoidable reasons. As a result, you may have to keep repaying loans in your retirement.
In such situations, you should refrain from using your retirement savings to repay your loans. Instead, you can consider investing in insurance plans that can generate good returns on your investments and use these returns to pay off your loans.
- Manage New Expenses
While some regular expenses like commuting to work, children’s education, etc., are non-existent in retired life, some new and unexpected expenses like repairing of home, medical expenses, joining a club, etc., can crop up.
Such expenses can be managed with insurance plans that allow you to systematic withdrawals once the lock-in period is over.
It might be clear by now that there can be many reasons to invest in a life insurance plan during your golden years. However, it is very important to choose a reputed insurance plan that can offer you different options to choose from.
Once you identify the insurance plan that is best suited for your needs, you can go ahead with buying the plan and renew your quest for financial security post-retirement.