Gone are those days when pension alone served as the security blanket for the golden years (retirement era) of one’s life. As more and more youths are opting for the dazzling city life and a 9 to 5 job, the past few years have witnessed a rapid escalation in the growth of the private sector. This has resulted in a rise in early retirement plans, and individuals looking for the best viable options are becoming a commonplace thing.
However, what’s fascinating to note is the mounting popularity of insurance policies as an additional and often, even the primary source of securing a hefty retirement fund. With a host of specialised retirement insurance plans available online, finding the ideal one that suits your needs has become both easier and more difficult at the same time. One such product is a term insurance plan.
What is term insurance plan?
Term life insurance or term insurance is a type of life insurance that provides coverage at a predetermined and fixed rate of payments for a limited period as decided before purchasing the policy. If the policyholder dies during this tenure, the beneficiaries listed are paid a death benefit. Life insurance can prove to be one of the most secured options to individuals to help keep the uncertainties at bay.
How is a term insurance policy beneficial after retirement?
There are several focal points that a term protection plan offers to retirees. However, one should research and pick the right term plan for themselves.
Easy pay-out options: One of the best things about term insurance is its convenient pay-out option. One more benefit of a term plan for retirees is that if your policy is active for over 10 years, then the chance of claim rejection is almost nil. This spares the beneficiary from getting bothered in a troublesome time.
Debts and liabilities: A term protection plan helps shield senior residents and retirees who have loans and obligations. If the policyholder dies, any outstanding debts or responsibilities can be covered from the term policy’s pay-out amount.
Riders: Along with financial protection term plan also offers extra advantages like riders. This enhances the coverage of the primary policy. There are various riders that one can opt for, such as critical illness, disability, amongst others.
Tax exemptions: The premiums that the retirees pay for their term life insurance is eligible for tax exemption. Also, the claim amount received by the beneficiaries is not taxable under Section 10D of the Income Tax Act. Apart from taking advantage of the term insurance tax benefit, policyholders also get a secure life cover for their loved ones and can thus have a stress-free life in the long run.
Financial security: With the growing age, medical expenses also go up. And this is one of the significant challenges after retirement. It is not always feasible to rely upon the kids to pay for doctor’s visit expenses. Besides, health insurance will only take care of a specific segment of hospital bills. Thus it gets essential for a retiree to plan a term life insurance well ahead in life.
Security for your family members: Term insurance helps in securing your family’s needs in your absence. The coverage amount that the beneficiaries receive enables them to lead their current lifestyle without worrying much about the expenses. Moreover, nowadays, people delay their marriage and have children in later years. In such cases, it happens that till the retirement age, your children are yet to complete their education or get married. Here, the term insurance’s death benefit amount help them in fulfilling their dreams by providing them with financial assistance.
Thus, owing to the several term insurance benefits, one should definitely include it in their retirement planning. Several insurance providers offer term insurance plans at different stages of life, however, with varying premiums. You can use a term insurance calculator to compute an estimate of the required monthly premium to meet your sum amount.
Retire Rich, Go away Stress-free and Happy.