Income replacement is one of the significant reasons why breadwinners in the family consider opting for life insurance. But do you still need one after you retire? Let’s see how.
People buy life insurance to insure their life. They make sure that their family members do not have to suffer from financial difficulties in their unexpected events through an insurance plan.
So, it is right to say that life insurance is purchased by people to make sure that their family receives some financial assistance to make up for the loss of their regular income.
A common question arises –
Whether you need life insurance after retirement as you do not earn a regular income anymore?
Life insurance is meant to protect families from loss of income. If you retire with debt or have children or a spouse that is dependent on you, having life insurance even after retirement is generally considered wise. Here are four different ways life insurance can help you and your family in your retirement years:
1. Support your family financially
You might already be in the age group of 50-60 years if you plan to retire soon. Your children, too, may have grown up by now and have lives of their own. For your spouse, you might have savings and investments in retirement plans.
Your retirement years are your second innings, a new life where you leave behind your working life and find time for yourself. During this time, you want to be empowered to do all that you could not while working – going on vacations, fulfill your dreams, pursue hobbies, spending time with friends and family, pilgrimage etc. However, to enable yourself to have a worry free retirement, you need to plan right, so that you can truly enjoy your golden years.
So, while your family may not be directly relying on you for their finances, the sum assured of the life insurance policy, in case of your demise, can help you to secure your family’s future financially. This is true especially for your spouse, as living alone may come with its own set of additional expenses like a full-time caretaker, other medical expenses due to age-related factors, etc.
2. Stay financially independent even after retirement
Retirement is not just a state of mind of an individual but also a financial issue. Most of us will argue that we are too young to plan for retirement. However, when it comes to retirement planning, it is never too early to begin. Retirement planning should be done in such a way that you can easily meet your medical expenses and living expenses.
To meet these expenses, life insurance is an attractive option available for you. Irrespective of your age, you must plan your retirement efficiently to stay financially independent. This ensures that you get a huge corpus on your retirement, which can help you to maintain your lifestyle without any complication.
3. Repay loans
A lot of people continue repaying their loans even after retirement. Rather than using your savings to repay your loans, a life insurance plan can be a smart choice. It will act as a financial protection back up in case something unfortunate were to happen and this will help ensure your spouse will not have to dig into the savings to repay off the loan.
4. Manage unexpected expenses
There can be several expenses post-retirement. Instead of using your savings or money from your retirement plans, you can let life insurance take care of those expenses. With various insurance plans available, you can withdraw your investment after a certain period of time. This facility can be used for managing financial emergencies.
Several reasons make life insurance a smart choice, so you can have hassle-free golden years. Make sure that one thoroughly understands the various types of policies available. This will allow one to select a policy that best suits their requirements and offers maximum post-retirement benefits.