Life insurance policies serve a different purpose at different stages of life. Young individuals purchase a life insurance policy to secure the financial future of their family against any eventualities. Similarly, a life insurance policy also serves the purpose of creating a secured retirement fund for the future for senior citizens.
To ensure the financial security of an individual even after retirement, there are different types of life insurance products available in the market such as a whole life insurance plan, retirement plan, etc. let’s read further to know why life insurance for senior citizens is a must-have.
Why Do Senior Citizens Need Life Insurance?
There are various reasons why an aged person needs a life insurance plan. However, one of the main reasons is that a life insurance policy works as an income replacement for the family. After retirement, the regular income of an individual stops. Moreover, in case of the demise of the senior member of the family, the financial burden falls upon the children. So, to deal with any type of financial crisis that may arise due to any eventuality, it is imperative to have a life insurance plan. A life insurance policy not only provides comprehensive coverage to the family of the insured but also takes care of the future financial needs of the family.
Here are few reasons why senior citizens need life insurance:
Financially dependent kids
Nowadays, it is very common to get married in the 30s and have kids in the late 30s or after that. This means that by the time one retires, their kid would be financially dependent on them. They will most likely pursue higher studies or start their careers. With a life insurance plan for senior citizens, one can continue to protect their child financially even after retirement.
Decreasing life expectancy
As compared to before, the life expectancy of people has decreased significantly. Nowadays, lifestyle diseases are very common among young individuals. Due to hectic work culture and following an unhealthy lifestyle, people often suffer from diseases like high blood pressure, diabetes, lung diseases, etc. Thus, it is extremely important for an individual to create a financial cushion in the long term and the best way to do this is to have a life insurance policy. A life insurance policy not only provides insurance coverage to the family of the insured in case of any eventuality but also takes care of their future liabilities.
Takes care of Spouse
When an individual purchases a life insurance policy for senior citizens over 70 years, then they get immediate coverage. This means that if the policyholder dies within a few years of purchasing the policy, then the sum assured amount is paid to the spouse or nominee of the policy. This helps him/her to fulfill the day-to-day financial requirements of life.
An individual, 60 years or above can opt for an immediate retirement plan, wherein the benefits are paid immediately as a regular money income after the payment of a lump-sum premium.
Leave behind a legacy
If senior citizens purchase a life insurance policy then they can leave behind a legacy for their children or grandchildren. This financial cushion can be used to fulfill the long-term or short-term objectives of life.
Different Types of Life Insurance Plans for Senior Citizens Available in the Market
The following are the different types of life insurance plans available for senior citizens in the market:
Whole Life Insurance Policy
This is a comprehensive life insurance product, which provides coverage for the entire life of the policyholder or up to 100 years of age. Along with the insurance coverage, the plan also provides the advantage of savings, thus the premium rate of the whole life insurance policy is generally high as compared to other life insurance products. With a guaranteed cash value offered by these plans, one can access this cash through loans or other withdrawal options.
Immediate Annuity Plan
Immediate annuity plans are retirement policies offered by life insurance companies. This plan is best suitable for individuals who are already retired or are retiring soon and have a lump sum amount to invest. As a single premium payment policy, the premium is paid only once and the benefits of the policy are paid immediately to the policyholder. The policyholder can receive the payment as a lump sum amount or can opt for a regular monthly income in the form of an annuity.
Benefits of Senior Citizen Life Insurance Policy
Along with providing financial security to an individual, there are many other benefits offered by the life insurance policy for senior citizens. Let’s take a look at these benefits:
- Take care of the future financial liabilities after retirement. So that one can live their retirement life stress-free
- Create an emergency fund in the long-term to deal with any emergencies after retirement
- Helps to take care of the medical expenses in old age
- Helps to save on taxes
- Reduces the financial burden
- Helps to fulfill the long-term financial objectives of life.
Wrapping it Up!
It is strictly advised to purchase a life insurance policy at a young age. However, if you haven’t purchased it yet, it’s never too late to have one. Make sure to analyze the long-term financial goals and the resources to meet them while zeroing in on a plan.