Term insurance is one of the most beneficial forms of life insurance. From being affordable to flexible, term insurance is convenient for people from all walks of life. You can get high coverage, such as INR 3 crore term insurance, by paying just a few thousand rupees. This is a major advantage and a reason why many Indians opt for term insurance.
Term insurance is mainly bought by young people who aim to build up a financial support system for their loved ones in case of their early demise. However, a lot of people choose to continue with term insurance even after they retire. Let’s find out why.
Reasons why term insurance may be needed after retirement
A lot of people buy large covers, such as INR 3 crore term insurance, and continue with it even after they retire because:
Young children
A big reason to get term insurance is to protect the financial wellness of your dependent family members. If you have young children who would depend on you even after you retire, you need proper financial planning. What would happen to them if you died? Who would you pay for their college admission if you were gone? You need to have a term plan in place till the time your children are financially independent.
So, if you have your kids when you are around 45 years old, your term insurance coverage should last till you are about 70 years old, and your kids are around 25 years old, and financially stable.
Debts
Another reason to have term insurance after you retire is your debt profile. If you have a home loan that will continue till you are 75, your term insurance cover should also continue till that time. If you die without repaying the debt, the entire financial liability will fall on your spouse and children, who may struggle to clear it.
The situation may worsen, and your family may even end up losing the roof over their heads. To avoid all such eventualities, analyse your debts and loans and ensure you have a large cover, such as INR 3 crore term insurance, till your loans are active.
Estate and legacy
If you wish to leave a sum of money for your children as an inheritance, you can turn to term insurance. Continue with your plan till you are around 80 years old. If anything happens to you within that time, your children can receive some financial help for their future.
Health condition
If you have been suffering from some serious health conditions for many years and they have affected your longevity, consider carrying on with term insurance even after you retire. After you die, your family can use the proceeds from the plan to pay for your funeral costs or clear any debt you have.
However, this will only be possible if you buy term insurance early in life. Do not wait till you are older and more unwell to get the policy, as your application will most likely get rejected at that time.
Tips to choose the best term insurance plan
If you need to have term insurance even after you retire, you must be mindful of the following factors when you look to buy the policy:
Coverage amount
Choose the term insurance coverage amount with care, especially if you wish to continue with it after you retire. Keep all the financial needs of your family in mind and then choose an appropriate cover, like an INR 3 crore term insurance cover.
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You have to assess the duration for which you need the protection of a term insurance plan. Mark this out very carefully and then select the policy tenure accordingly. Remember, once you buy the plan, you can’t modify it, especially when it nears its completion.
Budget
And finally, always keep an eye on your budget. Even though term insurance is inexpensive, it is a financial liability. You have to pay the premium for as long as the plan is active. Get term insurance for your post-retirement years only if you are confident of being able to pay the premium after your regular income stops.
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The final word
Term insurance is one of the best financial tools available to people of all ages, so embrace its advantages if you have not done so already. Indulge in some long-term planning and find plans that can offer coverage for many years, even after you retire.
Keep all the points mentioned above in mind and choose a good term life insurance plan with sufficient coverage to keep your loved ones financially protected for the longest possible time.
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