It is your duty to make sure that your family maintains the same quality of life before and after your retirement. Thankfully, doing that is not the hardest task in the world.
As you grow older, two points in your life will inevitably and undesirably show up at your doorstep:
- Having no income
- Growing old so that you can no longer take care of yourself
At this point, the only way out of this ticking time bomb is buying suitable insurance for yourself. The very rich probably do not need insurance and the very poor have government-sponsored programs to back them up. Hence, you need to contemplate your post-retirement journey very carefully, especially if you are a middle-class person.
Here is what you should do if your retirement age is coming closer:
1. Check if your employer covers you post retirement
You might be content now that you are comfortably insured by your employer. However, most employee benefits by companies do not last very long and disappear once retirement sets in.
Only very large firms provide insurance post-retirement. So, don’t be complacent with what you have if your employer doesn’t cover your needs completely. Do not think buying an outside insurance policy as redundant. Go out there and buy a plan that’ll do you good for the rest of your life.
2. Buy Health Insurance
As you grow older, your propensity to fall ill increases threefold. While you may think you have enough money to weather the storm, you really don’t. For instance, a hernia, which is a common medical ailment, costs around Rs 80,000 to get rid of surgically.
Plus, room rent in Indian hospitals costs Rs 2000 on an average. So in a week, your expenditure will be Rs 14,000. In the end, adding Rs 6000 for tests and checkups, you will have to shell out Rs 1,00,000. So while health insurance may look like a waste of money, not having one will prove to be more costly for you in the long run.
If you’re retiring early, chances are you will not be covered by government plans. Hence, you need to consider early retirement health insurance options.
3. Buy Term Insurance
While buying term insurance is necessary for everyone, it is especially important for people who have dependents.
Life insurance covers your dependents in the event of your untimely demise. If you have your family insured, you can make sure that they will have a steady source of income to meet their needs for years to come. This is why it is necessary that you buy plans that cover you for a longer duration of age.
There are plans that cover you only up to the age of 65, and there are plans that cover you up to the age of 80. Despite the former plan being cheaper, it is necessary that you pay a higher premium to cover your whole family in the long run.
While buying a costlier life insurance is usually better, it is not always the best option. You need to pick the best plan out of many. Choose the plan that fits your needs perfectly.
4. Insure Your Business
If your primary income is from a business rather than a job, you need to put buying business insurance in your pre-retirement checklist.
It often happens that a whole tree line of the family is dependent on how a single business performs. With shaky markets, bad seasons or other tragedies, expecting your business never to run dry for long runs is a huge mistake. Business insurance is especially important for already-established businesses.
What business insurance does is to allow you to continue running your business even when you are at a low, so you do not have to take dire steps and close your business. Once your business gets back on track, you can get back to normal life again.
Business insurance also protects you against accidental employee injury, damage of business property and damage claims from customers.
5. Vehicle Insurance If You Need It
While this insurance may sound extremely niche, it is just as important. This is especially important if your business depends on your vehicle. For example, a food truck, delivery trucks or home delivery two-wheelers. It is necessary to insure these vehicles, especially if your income depends on it so that you can weather the storm upon the destruction of property.
For other people, if you’ve got some extra money to spare, getting your vehicle insured will not hurt, but you need to prioritize health and life insurance over it.
Invest The Rest
Once you are sure that your whole family is properly insured, make sure you invest whatever amount is left with you. Putting your money in a savings account and earning some interest will certainly help. There are other options available too, such as mutual funds, stocks or investment plans by other companies.
Get your family insured and live your post-retirement life stress-free.
(The author is CEO & Founder, PolicyX.com)