Retirement is a time when you want to shrug off from all
responsibilities and be carefree. A few people who have accumulated
enough savings may have the luxury of opting for an early retirement,
while a few retirees are forced to work part time. Most retirees face
the dilemma of whether they should continue paying the Premium for their
life insurance plan or opt out of it. The answer is not definite and it
depends on a multitude of factors discussed below.
1) Are There Dependants?
large number of retirees continue to have financial responsibilities
even after they retire. They either work part time to fulfill these or
contribute their retirement income to the family funds. In cases, where
there is a late marriage and the children are still pursuing education,
it makes sense to continue with your life insurance policy. Nowadays, we
get to see such a scenario quite often. People marry late and as a
result their children are much younger when it is time for them to
retire. The time gap between parents taking retirement and the kids
becoming financial dependent is also widening as there is growing trend
among young generation to pursue education until they reach their late
There might also be special cases,
where a child would have lost his job and in such a scenario it makes
sense to continue with the insurance policy.
2) How Much do You Hold in Retirement Savings and What is Your Retirement Income?
you are retired, and you do not have any Dependants apart from your
spouse, then whether or not you should continue holding an insurance
policy would depend on the quantum of your retirement savings and
retirement income. Just think of a scenario where your spouse outlives
you for a considerable time, say 20-30 years, and calculate if your
retirement savings are enough, so that she can continue to maintain the
same quality of life as she is maintaining today. If you think there
could be a gap, it makes sense for you to hang on to your insurance
policy. The sum that your spouse would receive will help in funding the
3) Would You Like to Spare Money for Charity or Inheritance?
you have enough savings to meet all your retirement expenses and you
want to spend it the way you want without having a guilt of not saving
enough for your heirs, it makes sense for you to hold on to your policy.
The sum Assured amount can serve as an inheritance for your children.
If your children are well off and you do not feel the need to have a life insurance
for their protection, but you may have a relative who can benefit or if
you want to leave money behind for charity, you may decide to continue
paying the premium on your policy.