Why is it Important for Senior Citizens to have Life Insurance?
If you’re looking for a way to secure your family’s financial future from life’s many uncertainties, a life insurance policy is a suitable option. However, whenever life insurance is mentioned, people tend to immediately associate it with young individuals.
A life insurance plan is not only advantageous for young individuals but can also be immensely beneficial to senior citizens as well. Here are a few reasons why senior citizens may consider purchasing life insurance to help them secure their post-retirement future. But before we get to the main part of the article, let’s quickly take a glimpse at the concept of life insurance.
What is Life Insurance?
A life insurance policy is basically a contract between an individual and an insurance service provider. In this, the insurance provider agrees to provide a life cover to the individual of a predetermined sum of money for a fixed period of time.
If the said individual were to face an untimely death during the agreed upon period of time, known as the policy term, the insurer would be obligated to pay the predetermined sum of money, known as the sum assured, to the deceased individual’s nominees. This sum of money can then be used by the affected family to further their life goals as they see fit.
And in return for receiving this life cover, the individual would have to make certain payments, known as premiums, to the insurance provider at regular intervals.
Do Senior Citizens need Life Insurance?
Now, when an individual who is an earning member of a family faces an untimely death, the family generally gets thrown into disarray. Since an income stream is basically cut-off due to the death of the earning member, the affected family may not be able to lead a comfortable life or be in a position to further their life goals as and how they may want to. Here’s where life insurance steps in. It basically provides a financial safety net to the family of an individual in the event of their untimely demise.
Going by this, life insurance seemingly is useful for individuals who are still an active earning member of the family and who haven’t retired yet. However, it can be beneficial to senior citizens as well. Here are a few reasons why they may need life insurance.
1. It covers the loss of income
Although most senior citizens may retire by the time, they reach 60, there may be some individuals who prefer to continue working for various reasons. In such cases, a life insurance plan can help provide the nominees of the working senior citizen with a financial safety net in the event of their death. The pay-out that the affected nominees would receive upon the death of the senior citizen may be used by them to cover any loss of income that they would have suffered.
2. It covers financial obligations
Home loans and other major financial obligations usually have a very long repayment tenure. In some cases, they may extend well past an individual’s retirement age.
With a life insurance policy for senior citizens, older individuals can financially protect their family from unpaid financial obligations. The surviving family can simply make use of the proceeds that they receive upon the death of the senior citizen to settle their dues.
Benefits of Life Insurance for Senior Citizens
In addition to the ones elaborated above, opting for a life insurance policy for senior citizens also has a host of other benefits as well. Here’s a quick look at a few of them.
1. Gives your surviving spouse financial independence
One of the benefits of life insurance for senior citizens is that it gives the surviving spouse some much needed financial independence. The death benefit that the surviving spouse receives can be used by them to sustain their lifestyle without having to depend on anyone for financial help. With a source of income by their side, the spouse will be in a better position to manage their day-to-day expenses.
2. Allows your surviving spouse to take care of your dependent children
Some individuals may choose to have children quite late in their life. In such cases, the children might still be dependent on their parents even after they’ve become senior citizens. And in the case of a sudden death of a senior citizen, the children may be left helpless. However, with life insurance for senior citizens, the surviving spouse can use the death benefit pay-out that they receive to provide for their children’s life goals and their day-to-day expenses as well.
3. Let’s you leave a legacy for your family
One of the aims of every parent is to ensure that their children are well-settled. A life insurance plan can help senior citizens do this, because the financial pay-outs from the plan can add to the existing legacy that you may have in place, if any, to pass on to the next generation.
There you have it. Conclusive proof that despite being senior citizens, older individuals can still reap the benefits of life insurance.
That said, many life insurance plans have a maximum entry age beyond which you may not be allowed to purchase them. Therefore, it is advisable to check the maximum entry age of a life insurance plan before going ahead with your decision to purchase a life insurance policy for senior citizens.
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