When you are 60, when your regular earnings cease, and medical issues increase, review your insurance coverage once again. Policies that served you well in the working age might no longer be valid. After retirement, the emphasis is on protection against illness rather than income protection and prudent management of expenses.
Do You Still Need Life Insurance?
Term insurance is primarily used to take care of your dependents in the event of an untimely death while you are still in your working years. Post-retirement, the requirement tends to decrease. If your children are independent and there are no large loans, you might not require a term plan. Premiums are also very costly after 60.
But if your spouse, children, or someone else still relies on your income or if you have loans to pay, a term plan may be thought of for another couple of years.
Health Insurance Becomes A Priority
As one gets older, the cost of health becomes one of the largest expenses. Most retirees rely on employer health cover, but this may be scaled down or eliminated after a few years. An individual health insurance policy becomes absolutely necessary.
Even if you are covered for health, verify whether it will suffice in the future. Medicinal expenses are increasing rapidly. A Rs 5 lakh treatment today can cost much more a couple of years down the line. One solution to this is to purchase a top-up policy on top of your usual health cover. A top-up policy provides additional coverage at a lower price, particularly for hefty hospital bills.
For instance, if you have a Rs 10 lakh health policy already, you can take a top-up policy of Rs 50 lakh and have a deductible of Rs 10 lakh. The implication is that the top-up will only occur when your hospital expenses exceed Rs 10 lakh. For ease of making claims, it's preferable that both policies are taken from the same company.
What Should You Check Before Buying?
Before purchasing a new health policy, prepare yourself for medical tests. Carefully read the policy terms. Be cautious of waiting periods, restrictions on room rent, and the hospitals covered. If your current policy has low coverage or conditions that are too many, consider an upgrade.
Life cover, however, should not occupy a large portion of your retirement budget. In case of excess need, it's fine to drop it and prioritise savings and health.
Check Your Cover Regularly
Check your insurance needs every few years. Your costs, expenses, and financial circumstances might have changed. The idea is to carry just the right amount of insurance—not too much, not too little—to keep you covered without paying an excess. At 60, insurance becomes less about protecting other people and more about taking control of your own future. Keeping an eye on things can make a huge difference to your mind at ease.
