25 AUG 2016
Life insurance for ageing adults
Finding life insurance for people who are in their advancing years is a little tricky due to the fact that insurance not only becomes expensive but also difficult to get. However, there are certain types of plans that can be useful for seniors, especially with retirement looming large on the horizon.
ULIPs offer a combination of life insurance and investment. In ULIPs, some part of the premium that you pay goes towards investments in equity, government bonds and other market-linked investments. The funds are invested in debt and equity instruments depending on your choice, which will be determined on your market outlook and risk-taking appetite. A very good choice for those past their prime in terms of age. The tax-free provisions also help in reducing your tax burden. In ULIPs like Edelweiss Tokio Life – Wealth Accumulation(Accelerated Cover), The returns are dependent on market volatility, but generally, they range between 6-8% over a longer time horizon.
Endowment plans like Edelweiss Tokio Life – Wealth Builder offers you guaranteed returns upfront along with death benefit. This means that on maturity of the policy as well as on death, you get an assured maturity benefit and Sum Assured respectively. Also, the investment in these types of plans attract tax rebates under section 80C and the payouts under section 10D of the Income Tax Act, 1961. A safe bet for receiving assured returns in your retirement. So, if you are above the age of 40 and invest a part of your savings in these plans for a period of 20 years, you have definitely made a provision for old age.
Annuities are life insurance plans that provide an assured income after a certain period for the rest of your life. The life insurer makes payment of a fixed income either monthly, quarterly or annually in return for a premium that you pay regularly till a certain period. So, in effect, you make payment of a fixed sum every year in return for an assurance that you will receive a fixed sum on retirement till the rest of your life. Annuities have two clear phases; first is the accumulation phase where premiums are collected, and second is the distribution phase in which the regular payouts are made. The singularly outstanding feature of annuities is guaranteed income. For retired people, having the assurance of a secure and stable monthly income is worth its weight in gold.
The above plans will ensure that ageing adults like your parents would be secured in their retirement with secure financial safeguards.
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