I am a pensioner with some rental income. Can I buy a term insurance plan?

I am a pensioner with some rental income. Can I take term insurance? If yes, which insurance company should I consider? What should I keep in mind while buying a policy?  

Name withheld on request  

Reply by:  Sanjiv Bajaj, Jt. Chairman & MD, BajajCapital   

Retirement is a significant milestone in one’s life, marking the transition into a new chapter filled with new opportunities and experiences. It is when we can finally take a step back from the hustle and bustle of our careers and focus on enjoying the fruits of our labour. However, amidst the excitement and anticipation, there is also a need for careful consideration when it comes to financial planning.  

Approaching retirement with mindfulness and care is crucial, especially when ensuring financial security for ourselves and our loved ones. This is particularly true in unique circumstances, such as voluntary retirement at 55. The decisions we make during this time can have a profound impact on our future well-being and that of those who depend on us.  

Suppose you are taking voluntary retirement at the age of 55 and have some liabilities, such as a pending home loan, the marriage of a child, etc. In that case, you should prefer buying a term insurance plan. However, buying a term plan later can also affect your pocket because the premium will be high. However, the premium amount might look very small to secure such liabilities. Typically, one can buy a term insurance plan until age 65. Make sure you buy it only if you have any liabilities and dependents. Otherwise, investing your money in a small savings plan and building a corpus for estate planning or your later retirement years may be suitable.  

Hence, you can explore term insurance policies for financial protection. These policies can serve as a safety net, providing much-needed financial assistance to our loved ones in the event of our untimely demise. They can offer peace of mind, knowing that our dependents will have the means to continue their lives without financial hardship.  

Moreover, term insurance policies can also help us create a lasting legacy for future generations (as mentioned above). By carefully considering our options and choosing a policy that aligns with our financial goals, we can leave behind a valuable asset that provides for our loved ones and ensures that our wealth is distributed equitably among our heirs. This consideration of estate equalization is essential, as it prevents potential conflicts and ensures a fair and just distribution of assets.  

However, in the midst of all the financial decisions and considerations, it is essential to remember that this is a deeply personal and emotional process. Retirement is a time of reflection, looking back on a lifetime of achievements and planning for the future. It is normal to experience a range of emotions during this period, from excitement and anticipation to uncertainty and anxiety.  

Therefore, it is advisable to take your time and thoroughly evaluate your options before making a decision. Seek advice from financial professionals, consult with trusted friends or family members, and consider your own unique circumstances and aspirations. By doing so, you can ensure that your financial goals align with your choices and that you are setting yourself up for a secure and fulfilling retirement.  

Remember, this is your journey, and every step you take towards securing your financial future is a step towards peace of mind and a legacy that will endure for generations to come. Embrace the process, stay informed, and make decisions that resonate with your values and aspirations.

 (Views expressed by the expert are his/her own)