Old age is a time when many people - including you - plan on fulfilling their long-held dreams. It is the perfect life stage to make up for lost time and accomplish what you have been wanting to do for years, whether it’s travelling to new places, starting a new venture, or simply relaxing at home without worrying about your depleting bank account balance. You may also have pending responsibilities to fulfil, like your child’s wedding, buying a home, etc.
However, when retirement steps in, you lose your earning potential - making it difficult to achieve your goals and fulfil your responsibilities.
With a steady life insurance plan, you can rest easy knowing that you have a secure financial foundation to realise your dreams as well as meet your financial goals. Furthermore, you can ensure that your families have financial security - should something unfortunate happen to you.
Life insurance for senior citizens is specifically designed to meet their different needs. In this article, we will discuss everything about buying life insurance for senior citizens.
First, What Is Life Insurance?
Life insurance is a contract between you and the insurance company under which the insurance company agrees to provide financial protection - in exchange, you are required to pay a fee called a ‘premium’.
The main purpose of life insurance is to create a financial safety net for your loved ones by giving them a sum of money in the event of your untimely demise. Not only does it guarantee a financial payout to help maintain their lifestyle, but it also provides peace of mind knowing that you have taken steps to protect them.
Life insurance policies also serve different purposes at different stages of life. For instance, you can accumulate funds for your child’s higher education, buying property, financing a wedding, planning for retirement, etc.
There are certain plans designed specifically for senior citizens, such as whole life plans and retirement plans. These plans help to cover retirement needs without straining your finances.
Why Do Senior Citizens Need Life Insurance?
Here are some reasons why you should invest in life insurance if you are a senior citizen -
1️⃣ Lending Support To Financially-Dependent Children
People prefer to get married and have children later now, and the practice of early marriage is declining. If you have gotten married late as well, your kids may not be financially independent by the time you retire. They may likely be pursuing higher education or just starting out in their careers, and so, may still need financial support. It is, therefore, important to have a secure retirement plan in place so you have enough financial resources required during their life transitions even if you don’t earn any more.
2️⃣ For A Enjoyable And Comfortable Retirement
The loss of steady income during retirement causes a great deal of stress and financial hardship. A sound financial strategy can reduce financial stress by providing a steady income source to cover expenses in retirement.
A life insurance plan offers you the option to tailor it with a range of payout and customisation options to provide a steady, reliable source of income during your retirement years, thereby alleviating the pressure on your pocket. The amount can be used for daily expenses, medical bills, life goals - among other things.
3️⃣ To Ensure The Well-Being Of Your Spouse
A life insurance policy helps you protect your spouse's future as well. It ensures financial stability for the surviving partner, giving them the peace of mind to live a life of dignity and security. By investing in a life insurance policy, you can ensure that your spouse will not be burdened with financial worries in the event of your untimely demise.
4️⃣ Life Expectancy Is Rising
Medical advancements have led to a significant rise in life expectancy today. India's average life expectancy was calculated to be 70.19 in 2022. It is anticipated that it will continue to rise in the future as well.
As a result, our society is seeing a shift in what it means to age, as many seniors are living life to the fullest in their golden years. Some people travel the world, others pick up new hobbies, etc. As such, it is important to plan and ensure that you have the financial stability and resources necessary to truly enjoy your retirement.
Moreover, you will have to pay for your day-to-day expenses and medical bills as well. Having a steady source of income is essential to fulfilling these dreams and responsibilities. A life insurance policy will allow you to accomplish everything you want without having to worry about your bank balance.
For example, Ravi, 59, wants to plan for his retirement. He will be retiring at 60, so he plans to invest in a single premium annuity plan. The plan requires only a one-time premium payment at the time of policy purchase. By the time he enters his retirement phase, he will start getting a steady stream of income periodically that can be used to take care of all of his retirement needs.
5️⃣ To Leave Behind A Lasting Legacy
As you age, you will want to make sure that your children and grandchildren are well taken care of in your absence. You would want to leave an inheritance for your descendants. Purchasing life insurance can be an excellent way to ensure that you can create a nice financial legacy for your loved ones.
Life Insurance Plans for Senior Citizens
If you are a senior citizen, it can be quite challenging to choose an appropriate life insurance plan. It is important to weigh the pros and cons of each policy, keeping in mind your exact needs and requirements. Once you have evaluated and assessed various aspects, the next step involves comparing the costs and benefits of different policies - in order to choose the right one that best suits your needs.
There are several choices available in the market, among which these are the most popular -
- Whole Life Insurance
Whole life insurance offers financial security until 99 or 100 years of age. This is a great option if you want to remain covered throughout your entire life, while also leaving a lasting legacy for your loved ones. The policy pays out 3 benefits -
⟶ Death Benefit: The cover amount to your nominee in case you pass away during the policy period.
⟶ Maturity Benefit: You receive the cover amount if you survive the policy period.
⟶ Survival Benefits: Some plans may pay survival benefits once the premium payment term gets completed.
- Single Premium Annuity Plan
Single premium annuity plans are retirement plans designed to help you attain financial security during retirement. This plan requires you to make a single lump-sum investment, which you can do so with retirement benefits you receive from your employer, with proceeds from financial instruments you invest in, such as ULIPs, mutual funds, etc.
With a single premium annuity plan, you can conveniently enjoy the benefit of a secure retirement without any hassles, as all that is required is a single, one-time investment. The insurer will pay you regular payouts for a specified period of time, or for your entire lifetime, after your retirement - depending on the customisation options you choose at the time of policy purchase.
Life insurance can serve as a helping hand at different stages of life. Not only does it secure your family's financial future, but it can also provide you with a source of income during retirement. If you are a senior citizen, make sure you invest in the right plan - so as to ensure the financial security and stability you need to enjoy your twilight years.