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Buying Life Insurance For Your Retirement is A Smart Decision. Here’s Why

Imagine your life 30 years from now (your post-retirement life) – You are retired, you are living in your beach house with your spouse, and your kids are self-sufficient! Sounds like a picture-perfect life, right?

For the most part, yes it does! The catch?

If you picture yourself living such a peaceful and dreamy retirement, you need to have life insurance in place, while you are still working.

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Here’s why: “You have always strived hard to give your family the best of everything and will continue doing so even after you retire.”

But have you ever imagined how your family would manage in your absence? Will they be able to live the same lifestyle that they live today?  

To suppress this ever-lingering fear, you need to make a smart decision today — the decision to buy ‘Life Insurance’. This one decision can offer the much-needed peace of mind for the rest of your life.

Given below are a few reasons why life insurance for your retirement is a smart choice:

  1. Acts As Income Replacement

Any life insurance plan offers the basic benefit of income replacement. For instance, term insurance secures the financial future of your loved ones in an unfortunate event like your untimely demise. In such a situation, the insurer pays your nominee a lump sum amount, thereby, financially supporting them in the time of grief.

Similarly, for individuals who are about to retire, a monthly income scheme (retirement plan) offered by reputable insurers like Max Life Insurance can offer income replacement in the form of regular payouts during retirement.

  • Provides Investment Benefit

Several life insurance plans such as monthly income schemes and guaranteed income plans offer growth of your invested premium. These investments not only guarantee you maturity benefits but also offer comprehensive life cover, thus securing the financial future of your family even in your absence.

Plans such as monthly income plans ensure that you aren’t hard-pressed to meet your future plans including vacations, weekend plans, and other commitments. As the name suggests, monthly income schemes provide you with a certain sum of money every month after a few years of payment of premium.

You should note that different insurance companies offer different types of monthly income plans. Meaning, some plans may start the monthly payout after the premium payment period is over while others may start when you are still paying the policy premium.

These plans also vary in terms of entry age, coverage provided, and benefits offered. Therefore, spend some time to understand the different plans available online before buying one.

  • Financial Assistance to Pay off Mortgage in Your Absence

Imagine a person who has an outstanding home loan worth Rs. 20 lakhs and he passes away due to an unfortunate accident. In such a case, his family will have to shoulder the entire burden of the home loan. The situation can become worse in the absence of any financial plan, thereby, creating financial havoc for his surviving family.

At such times, life insurance can act as the perfect shield and take care of any long-term loans in the absence of primary breadwinner. Therefore, if you have any outstanding loans or mortgage, opting for the right coverage amount can save your dear ones from the burden of loan repayments when you are not around.

  • Provides Tax Benefits

Buying a life insurance product, like a monthly income plan for your retirement will offer you not only protection but also tax benefits. Thus, the tax treatment on life insurance products allows you to have more flexibility over your income.

Life insurance plans offer deductions under section 80C (up to 1.5 lakhs on annual premiums paid) and section 10(10D) (on maturity amount) which further lower your taxable income.

The Bottom Line

Life insurance plans can provide more than just the necessary protection during your working years. These smart investment plans can continue to provide benefits throughout your golden days and improve your retirement.

So, start your retirement planning process today by doing proper due diligence. Meaning determine your specific needs, get quotes from quality life insurance providers, and review the insurers before you make your purchase.

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About the Author: Praveen Unnikrishnan

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