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Life begins at 60 is the new mantra for living. Post 60, you are more or less free from the responsibilities of rearing children and going to work. This is the time you enjoy your life by taking up newer pursuits and travelling the world with your spouse. However, all this is possible only if you have planned for your future securely and early on. Thoughtful planning during your youth always leads to peaceful retirement.
When you plan for retirement, you should always picture the kind of life that you want post 60. If you want a healthy life where you are indulging every whim of yours without having to depend on your children, you need to invest both in your health and in policies which would multiply your corpus manifold for you. Life insurance is one of the best policies for planning for your retirement as you can derive a steady stream of income from it and also safeguard your spouse and children from excessive financial burden in your absence. With the corpus that you save, your outstanding debts can be paid off aside from meeting other expenses.
When should you buy a life insurance policy?
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Ideally life insurance policies should be bought as soon as you start earning even though you can buy one in your late 30s or early 40s. Buying a life insurance policy early in life translates to lower premiums on account of better health. Moreover, you get a longer period of time for gathering your corpus. Therefore, you should start investing early in your career so that you can retire with a lump sum which would prove to be enough for you.
Term insurance policies are good ways to invest your money for the future as you get a long period to build the corpus you want. Term insurances are usually for periods of 15, 20, 25 and 30 years. Depending upon your age, you can sign up for one of them. If you are in your early 20s, do not opt for a short term policy which gets over in your mid-40s as buying another insurance policy would prove to be more expensive for you.
How much cover should you get for yourself?
The coverage that you get for yourself in your life insurance should be enough to support the lifestyle that you lead now. Therefore, you need to consider inflation and the term for which you are getting the cover for yourself. Considering an inflation rate of 6%, a term insurance of Rs 50 lakhs would amount to only Rs 28 lakhs in 10 years. Therefore, you need to think of the long-term inflation rate prevailing in order to get enough coverage for yourself. Opt for a term insurance which offers a large enough corpus in future, although you may have to pay high premium for it. You can also buy inflation-indexed life insurance policies where additional cover can be added every couple of years.
What kind of life insurance policy should you opt for?
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A policy which offers death benefit along with steady income streams is a good idea. You can also opt for money back policies although they are slightly more expensive than usual policies.
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