Life Insurance Policy provides various benefits during the policy tenure. It has different variants serving different purposes all in favour of policyholders. Generally, people search and invest in such policies at a young age, while they are working, having assurance and security for their family. However, adopting policies is not so common in senior citizens. But if you are retiring from your job and want to know the benefits of life insurance for you, keep reading as we unveil all the right reasons to avail a life insurance policy for yourself.
Annuity payout frequencies
One of the significant concerns that remain with senior citizens is payouts. After retirement, life insurance gives you the freedom to choose your payout option. These plans offer monthly, quarterly, semi-annual, and annual payout that is selected by the customers accordingly. It reduces future financial worries and provides social security benefits as an annuity.
Children might be dependent on you
We all want a secured future for people we leave behind. Spouse and Children are often dependent on you financially. Investing in life insurance plan makes sure that it takes care of them in your absence. Having life insurance can act as a source of income when you are not around. It gives your family financial freedom to take care of their needs and household expenses in case the breadwinner is no more.
Leave behind a legacy
If you have children and dependents who are financially dependent on you, having a life insurance plan can secure them financially after your death. A life insurance policy always entitles your dependants to get a large pay-out in your absence by leaving a legacy behind.
Take care of debt and loans
Our major cause of concern is the loans and debt that get left behind. They may act as a burden on the family and this situation could leave your family members in a pile of debt. However, by adopting a suitable life insurance plan, this situation can be avoided and the family can pay off the debt or the loan with the help of the assured sum.
Financially independence is the most desired asset a person looks. After a certain age, where people generally get dependent on their family members, you may have an alternative where your sum assured will act as a source of income during that phase of life. You will have the policy as an investment that will supplement your retirement and security.
The cash value of the policy can grow tax-free. You often get a rebate of some percent from income tax and even if you withdraw funds, those funds may be taxed at a lower rate.
Buying life insurance at any age will provide you with benefits that will ensure a healthy and secure future for your family. The market is full of such plans for senior citizens that provide many life insurance policies along with long term benefits. It is best to invest in such plans and remain stress-free for the rest of your life and according to Section 80C of the Income Tax Act, 1961, you can avail of an income tax benefit with a life insurance policy. It is to note that tax deductions under Section 80C for senior citizens is calculated when the individual is at least 60 years. Those who have taken a voluntary retirement scheme (VRS) can avail it later when they turn 55.
To compare the available options in the market, decide on your budget and choose a plan that best suits your needs and requirements.
Disclaimer: The key points mentioned above are for information purpose only and one should avoid taking it as any financial, investment or tax advice. You are requested to consult your financial advisor to know about your complete financial needs and making any financial decision.