Your children are grown up and independent. The mortgage on the home is repaid. You are now retired and enjoying the golden years of your life. In this situation, there is no need for insurance coverage, right?
Typically, life cover is availed to replace the loss of income in case something unfortunate happens to you prematurely. When you are retired, there is no income so there is no question of its replacement. However, before you allow your insurance policy to lapse by not paying the renewal premium, take a step back and consider your financial situation.
There are several exceptions when you do need insurance coverage even after the age of 60. When you are looking for life insurance for retirement, you must consider that the premium may increase. It is also advisable you try to find an affordable insurance policy that provides the required cover. Before you cancel your existing policy, it is very important to know that in the future you will never be able to procure a new plan at the same premium.
Know the plan
Depending on the type of insurance policy, the premium varies. The most affordable form of life insurance cover is a term plan. It pays the benefits to your beneficiaries in case an untoward incident occurs during the policy term. This type of policy does not include any savings component.
The other kind of life policy is the traditional plan that includes cash value. Insurance policies such as endowment plans and unit-linked insurance plans (ULIPs) accumulate cash value during the tenure. In addition to the death benefits, these types of life policies pay maturity benefits at the of the policy tenure.
Experts recommend a term plan with a fixed premium, which provides death benefits that are adequate for a specific goal. Here are three reasons why the answer to “do I need life insurance after 60” is yes:
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If you have debt or continue to be employed
If you still are paying off loans, a term plan is advisable. Avail of an affordable term plan that ends with the last loan installment. Alternatively, if you continue working during your retirement years, an insurance policy is recommended to provide financial stability to your spouse during your absence.
If you have a disabled kid
Your child will require support even after your retirement. It is recommended to avail of an insurance policy that provides coverage during your lifetime and pays the death benefits if you and your spouse not around to take care of the child.
If you are looking for a low-risk investment avenue
If you are averse to risk and have an investible surplus, an insurance policy may be beneficial as an investment. Generally, insurance policies deliver higher returns when compared to the interest rates offered by banks on fixed deposits. Moreover, the benefits received from an insurance policy are tax-free, which increases the effective rate of returns.
Continuing insurance coverage post-retirement may be complicated. Therefore, it is recommended you take the guidance of a professional expert who can provide you with unbiased and beneficial advice.