Is Buying Term Life Insurance Beneficial for Retirees?
“Everyone plans to have a relaxed and peaceful retirement life with family after years of hard work. While the idea itself sounds quite appealing but the later years of life must be secured as well.”
That is when having a term life insurance policy becomes crucial, as no one wants to spend their entire savings, outlive them and leave their own family in an extremely difficult position.
Therefore, buying a suitable term insurance plan is highly necessary and beneficial for retirees. Read on to know why term life insurance is considered so important for the retirees along with its benefits.
Why is Term Life Insurance important?
Term insurance is a necessary requirement for all individuals in today’s time. The change in demographics and lifestyle preferences point to the fact that people may have financial liabilities that can go on to affect them till the age of retirement and hence it becomes a mandatory measure to have a term life insurance. But before buying the insurance, it is important to what exactly is term life insurance.
The term insurance policy offers life cover to the policyholder for a definite period (between 5 to 30 years or more). It is a time-bound policy wherein the applicant is required to pay premium on a regular basis. After policyholder’s demise, the total amount of the term life insurance or the death benefit amount is given to the beneficiary or beneficiaries of the policy, protecting them against the financial liabilities.
Interestingly, now a person of 65 years can opt for a term life insurance; however, it will be subject to medical examinations. If he or she comes out clean without any identification of terminal illness, then that individual gets eligible to buy term insurance. But one has to remember that the insurance premiums will be considerable on the high side.
Benefits of Term Life Insurance for the Retirees
There are many advantages that a term insurance plan offers to retirees. However, one must research and choose the best affordable term life insurance for themselves. The advantages afforded are as follows: –
- Insurance payouts well within time: One of the best things about term life insurance is its timely payout. In absence of policyholder, the insurance payouts gets immediately settled after the family members fulfil the requisite claim formalities. Another advantage of a term insurance plan for retirees is that if the policy has remained active for more than 10 years, there is almost nil chance of the claim getting denied. As per the IRDAI guidelines, insurance companies cannot reject the claims if the policyholder has made every disclosure. This saves the nominee from getting hassled, especially when he or she is already going through a difficult time.
- Debt payment: A term insurance plan is useful for safeguarding senior citizens and retirees who currently serve debts. In case the policyholder dies, any remaining amount of policy holder’s debt can be covered from the term insurance policy’s payout.
- More benefits and riders: Along with the term life insurance policy, insurance companies offer additional benefits like critical illness, accidental benefits, partial disability cover amongst others. Although, one has to pay more charges for these, but they are quite crucial to opt for, as aged individuals are more vulnerable to injuries and risks.
- Exemptions on taxes: Taxes are not applicable to the premiums that the retirees pay on life insurance policies. Furthermore, the claim amount that the beneficiary receives are not taxed as per Section 10D of the Income Tax Act. This is yet another benefit that retirees get when they opt for a term life insurance policy.
- Limited premium payment plans: After retirement, a retiree can opt for limited premium payment plans in which premium payments are for a limited duration, but the coverage is for the full term. For instance, there is a limited premium payment plan available for 7 years which has a coverage duration of 15 years. This means that the policyholder has to pay the term insurance premium just for 7 years and the coverage duration will be for 15 years. Term insurance plans like these make sense if an individual does not want to strain his or her financial resources after retirement.
- Secures family’s future: Another big advantage of a term life insurance is that it helps in securing the future of the family after policyholder’s demise. That’s because dependent family members might not have the resources to take care of themselves and might have to depend on others. Herein, term insurance provides them financial security and independence, so that they can continue to enjoy the same standard of living as before.
- Financial stability: With the growing age, medical costs have tendency to go up. There are high chances of retirees facing financial difficulties. Term insurance gives them financial stability to manage their such expenses. Also, they can’t always depend on their children to pay their number of medical bills. Moreover, even if they have health insurance, it will only take care of a certain portion of the hospital bills and hence it becomes necessary for a retiree to opt for a term life insurance policy.
- Value for money: Term life insurance is a value for money option for the retirees because of the low risk associated with it. It’s pure life insurance that offers a significant sum assured at an accessible premium amount. This, in turn, ensures that the policyholder’s loved ones are secured in case of the difficult eventualities of life.
It’s never too late to make wise financial decisions at any stage of life. For retirees, the best way to go about it is to buy the best term life insurance plan for a sense of assurance and peace of mind. At BimaKaro.in, there are various affordable term life insurance policies available online which retirees can choose from. Take a quote today!