We meet many Senior Citizen who have been sold Life Insurance and regret that they have bought Life Insurance which is not needed by them
I often wonder why should they buy life insurance and tried to list the reasons:
1. Insurance is required for assets which are generating income. If you are generating income then you must buy insurance. Ideally such insurance should be bought an early age as it would be economical but if your earlier policies have lapsed then you can purchase a new policy. Please understand that pension is not treated as income generation. As Senior Citizens, one should look for ULIPS due to the flexibility offered.
2. Insurance for Tax saving, don’t ever fall in this trap of buying a risk cover just for tax saving. It is better to become a Proposer and buy insurance on your children who are generating income. Some insurance companies also allow buying insurance on grand children but this option should be avoided because insurance is needed on their parents and not on children life.
3. Insurance to leave legacy. This is a very wise decision because you have the power to decide the nomination. As senior citizen, you know that death is certain. You go for the longest term or whole life product where sum assured is given to one or more nominees. Rather than investing money on land and real estate, it is better to invest in life insurance which offers tax free life cover.
Insurance is mis-sold and fraud is committed when senior citizens are lured to buy insurance for good returns without realizing that insurance is a long term contract and premium paid can go waste if future premiums are not paid. Senior citizens should be careful in self declarations of medical history and habits. Any non disclosure would terminate the contract and defeat the purpose.