When you start working at a young age, you are always advised to invest your money so that it can grow over time and provide you with financial security in the future. While wealth gain is always a priority, however, it may not always translate into financial security for your loved ones in your absence. That is why you should also invest in a life insurance policy such term insurance.

While investing in this policy at an early stage is always the smart choice, there can be instances wherein a person might require purchasing this insurance at a stage nearing retirement. If you are an individual who is nearing retirement and are considering buying this policy, read on to understand how it could benefit you post your retirement.

What is term insurance?

Term insurance is a type of life insurance policy in which the insurer agrees to financially compensate the dependents of the policyholder. This compensation is given in the event of the policyholder’s sudden demise during the term of the policy. The compensation given is known as the sum assured or death benefit. The amount given can provide financial protection to the family of the policyholder from life risks. It can also help them have a financially secure future.

Should you opt for term insurance post retirement?

As a working individual, your focus would be on accumulating as much wealth as possible to live a comfortable life post-retirement. However, there are instances whereupon the money that you have saved could get depleted due to emergencies and other vital expenses that can occur at different stages of life. This could leave you with minimal savings for your retirement. In such cases, this policy should be considered keeping your retirement in mind. 

How could this insurance help post-retirement?

These are the reasons you should consider before purchasing this insurance policy:

  1. Financial safety of your dependents

For families who have a sole earning member, that person’s income is the only source of financial stability. In the event that the member was to pass away suddenly, the dependents could be left with lesser savings. Considering the added expenses post-retirement due to medical expenses, the savings might not be enough to cover the day-to-day costs. In order to reduce the burden on savings, this policy should be considered. The sum assured would help your dependents face life risks with ease. This also ensures that the savings do not get dented.

  1. Pay-off loans and debts

If you purchased a home with the help of a loan, a part of your income will be spent repaying this loan. There are instances where the repayment goes on even after the borrower has retired. This could be problematic since the repayment is being done either on pension or savings. If the borrower were to pass away suddenly, the responsibility of repayment falls on the shoulder of their dependents. With the help of this policy, your dependents can easily repay the loan or any outstanding debt. The remaining amount can help them sustain financial expenses while safeguarding the savings, Types of life insurance policy.

  1. For the future generation

As mentioned earlier, the sum assured from the policy can help your dependents. However, chances are that overspending or not being careful enough with expenses could deplete the sum assured. This could be problematic for the future of your children in terms of their education or marriage. Investing the amount that your dependents receive could help increase their wealth, which could be used for the financial safety of your grandchildren as well.

If you did not invest in the policy at a young age but are considering investing in it before your retirement begins, do consider these things before purchasing the policy. When you are going through plans, use the term plan premium calculator to see how much the plan would cost you based on your age and requirements.