While for some of you it might make sense to opt out of life insurance for a few others that might not be a good move. If the following scenarios look familiar to your life after retirement, then you may not want to let go of your insurance plan.
Life insurance with ridersIf you have opted for life insurance with riders that cover your medical expenses, then you might want to continue with it. You should opt out only if you have another medical insurance in place to cover your healthcare costs.
For dependentsWhen you have family members who are financially dependent on you, it is usually a good idea to not terminate the life insurance. Only if you have a substantial corpus that will let every dependent to live a life free of financial burden should you consider discontinuing your insurance policy? In case, you are paying off your debt after the retirement, then having life insurance becomes incredibly crucial for you and your family members.
Get tax benefit for your second inningsIn case, you are planning on opting for another job or setting up a second career after retirement then continuing your life insurance may be a good idea to avail tax benefits. You can get tax exemption under Sec 80C on premium payments and maturity amount.
Using an investment optionIf you are about to receive a lump sum amount after your retirement from any of your employee welfare schemes, then you can turn that money into insurance plans and earn good returns. Insurance is a safe bet when it comes to investment as it is not affected by market forces making it a low-risk investment.
Though all the above reasons are good enough for you to continue your life insurance you may want to look at the other side of the coin as well. Assess all the reasons that may lead to insurance plans eating up in your financial goals or reflecting negatively on your balance sheets. The sole purpose of life insurance is to secure yourself and your loved ones against unforeseen events and get some good investment returns. However, if you have better alternatives to fulfil your goals then evaluate and compare those options before deciding.
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The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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