MARRIAGE
BUYING A NEW HOUSE
NEW JOB
DIVORCE
CARE OF PARENTS
LOSS OF A LOVED ONE
CHILDREN'S HIGHER EDUCATION
RETIREMENT
LIFE INSURANCE AND MARRIAGE
IntroductionYou may have gotten by without life insurance when you were single, or maybe bought an insurance policy just to make some tax-savings. However, getting married has changed your life insurance needs. There is now at least one other person in your life who expects you and your income to help cover current and future living expenses. You will want to ensure that your spouse is taken care of financially, should anything ever happen to you.Why is life insurance important when you are married?Now that you are married, you have a spouse, and possibly children, who are dependent on you for financial support. If you die suddenly without life insurance, your family may have a tough time meeting their financial needs.To put things a little bluntly, will your spouse be able to pay for your car loan, maybe your housing loan as well, or take care of your parent's health expenses, maybe your child's schooling and higher education, all alone? Will your family be forced to move to a less expensive residence (if the existing one has a higher rent), or will your spouse be forced to leave your children with your aging parents in order to work full-time since you are gone?If anyone in your family will suffer an economic loss or hardship as the result of your death, then you need life insurance. How much life insurance do you need? Generally speaking you should purchase enough life insurance to enable your family to continue the lifestyle to which they were accustomed before your death. This can mean different things for different families. For example, you may want to have enough life insurance to cover your present household expenses, possibly your housing loan, car loan, or even set aside money for your parent's heath expenses, children's education and marriage expenses or your spouse's pension.If you are the sole breadwinner, then your life must be insured. Still remember that the death of the spouse who stays at home could also create financial hardship in terms of help needed for taking care of children or even housekeeping. If there are two breadwinners, then each spouse should have life insurance coverage because both individuals are mutually dependent on each other financially. If you have children... If you have children, you will want to opt for more life insurance. Should something ever happen to you, your children will be your spouse's biggest expense. Your spouse will have to provide your children with food, clothing, toys, tuitions, a higher education and maybe provide for marriage expenses. You should want to make sure that you have enough life insurance to cover these costs. The more children you have, the more life insurance you will need. ENJOY!Nominee/Assignee Your spouse should be assigned as the beneficiary of your life insurance policy in order to receive payment when you die. In case you assigned the policy to someone else in the family earlier and later added in your will that your spouse receive the proceeds from the insurance policy, your spouse will not receive the proceeds but your assigned family member will. To make life simpler, you could assign the policy to your spouse and make your children the nominee to the policy. Naming your spouse and your children as beneficiaries can make it easier for your children to collect if something happens to you and your spouse at the same time. (However, keep in mind that courts will not allow minor children to directly receive the proceeds of a life insurance policy.)
If you already have life insurance… If you already own a life insurance policy when you get married, you should do the following:- Review the beneficiary designation; for example, you may want to name your spouse as the nominee/assignee to your policy.- Review the adequacy of your coverage; for example, you may need to increase your insurance cover now that you are no longer single.
BUYING A NEW HOUSE
CONGRATULATIONS! You are buying a new house! Buying a house is an important step in your life, and is probably one of the biggest investments you will ever make! Even if it means having to take a loan from a bank or getting an interest-free loan from your employer, having "your own home" is always worth it all! Like most new homebuyers, you have probably financed your purchase with a home loan. Simultaneously, you may want to ensure that you have enough life insurance to enable your family to pay off any existing loan on your home in the event of your death. By having adequate life insurance, you can be sure that your family will be able to keep the house if something ever happens to you. Moreover, having your own house feels like making a new start! Think about what your life insurance needs will be once you are settled. Take a moment to consider these issues. A little planning now may help protect you and your family in the long run. Life Insurance and buying a new houseTaken a loan to finance the home :-Many people are unable to or unwilling (due to the finance and tax sops available) to pay the entire purchase value of their house when they buy their new home. That is the main reason why many people take a housing loan for buying a new house. Why is life insurance important when taking a housing loan?-Taking a housing loan may be convenient but read the fine print - it means that you own as much of the home as you have made principal payments for, the housing or finance company owns the rest.- Making all the principal payments may take up to 10-15 years or even 20 years.- What if something untoward happens to you during this period, before the loan is paid off? Your family may be put in the difficult position of having to pay the balance installments or to surrender the house to the finance company in case they are unable to pay the balance amount of money. This could present serious financial difficulties for your family. They may even have to sell the house in order to make up the balance payments.-This is where the proceeds of a life insurance policy would help. A life insurance may be used to payoff the remaining loan amount and keep the home for your family. How much life insurance do you need? How much life insurance you need to pay off your loan, of course, depends on how much your loan amount is. However, a few insurance companies do offer insurance policies that cover you for the loan amount only; for example, if your loan amount is declining on an annual basis - then there are insurance policies where your cover amount declines in line with the loan amount.How can you buy a life insurance policy that takes care of your loan amount? Most finance companies or housing loan companies expect borrowers to provide a security against their loans. The security provided usually is the asset - the house itself. However, a life insurance policy that is equivalent to the loan amount, assigning the benefits of the policy to the housing/finance company can be provided as security against the loan.,Moreover, a few housing companies add on an extra amount to the installment paid by the borrower. In the event of death of the insured during the term of the loan, the proceeds of the insurance policy payoff the balance amount to the housing or finance company.My hard-earned savings have financed my new home :-Congratulations! You bought a house on your own - no loan, no finance. However, that must have been a lot of your accumulated savings that have been now locked up into your new house. Buying a new house feels like making a new start, so ensure that you have re-evaluated your insurance needs now that your savings have been locked in for a considerably long period. The central purpose of life insurance is to provide adequate resources for your surviving loved ones in the event of your death. If you pass away, your family may be left with outstanding loans, funeral expenses, and the inability to meet daily costs. Will they get by? Whatever your situation, you should know how life insurance works and how much you can afford to buy.The primary function of life insurance is to provide adequate resources for your loved ones in the event of your death. If you die prematurely, your family may be left with numerous unresolved financial issues, including:--Unpaid loans-Credit card bills -Funeral expenses -Daily expenses (food, clothing, etc.) -No source of income to cover expenses such as your parent's health, spouse's financial needs for the long term or your children's higher education or marriage costs.Of course, the financial impact of premature death depends on your unique situation, including your marital status, the number of children involved, your debts and expenses, your need for income, and your goals for the future. But if any of these factors have changed as a result of your move, then you should take steps now to protect you and your loved ones.
NEW JOB
Congratulations! Starting a new job is exciting, but it could be slightly stressful as well. You need to adjust to different route to commute, a new work environment, new co-workers, bosses, and most importantly new responsibilities at the work place.Moreover, you may have to make some adjustments with your new employment benefits; maybe your previous job offered you just a health insurance policy, covering only you. Now you may be offered a comprehensive health insurance policy covering you and your family, a group life insurance or disability insurance. However, you may not be sure whether they are real benefits or may be you still need to make some quick decisions in a short period of time. To help you make decisions, here are a few things you should consider. Life Insurance and a new JobOne of the main objectives of having a life insurance policy is to provide financial resources for your loved ones in the event of your early demise. If the bread winner in the family dies, the rest of the family members may be left with many financial issues - including unpaid loans, outstanding debts and may be a life time of expenses to start worrying about. Life insurance provides financial security and peace of mind. I am covered through a group life insurance policy. Group life insurance provides insurance to a group of employees through a contract between an insurance company and the employer. It is similar to the types of life insurance that are available on an individual basis, although most companies cover their employees through a term life policy. Usually, a company offers a minimal amount of life insurance - around one to two times your salary at no additional cost to you.Does that mean I should now discontinue with my individual policy?While you maybe covered by a group life insurance policy, you should still recognize the need for an individual life insurance policy. Your premium for a new life insurance policy later will only be higher; when you may not be covered by your company (in an attempt to cut costs) or may be looking for a new job. Additionally, you could attempt to use your individual life insurance policy as a savings instrument. My company/employer does not cover me If your new employer does not offer group life insurance, you should recognize the need for insurance and may want to consider purchasing an individual policy. If you have a family that is financially dependent on you, life insurance can be very important. Starting a new job may mean that you have new insurance needs. For example, if your income has increased, you may need to increase your insurance to maintain a consistent relationship between your annual earnings and your coverage amount. But if any of these factors have changed as a result of your move, then you should take steps now to protect you and your loved ones.
DIVORCE
Going through a divorce can be very stressful and frustrating; it disrupts your life, family, and financial stability. Perhaps there are issues that you are only learning to come to terms with, such as single handedly taking care of your children, your financial stability now that it is all dependent on you. Now is the time to review your policies so that you and your loved ones remain protected.Life Insurance and a DivorceTypically, divorce raises a number of issues regarding life insurance. If you have a life insurance policy already, you may want to re-evaluate your coverage and change your nominee. Your divorce may have left you with fewer assets or more people to protect in the event of your premature death. Because of the impact divorce can have on your finances, your need for life insurance will most likely change. The impact will be greatest when there are children involved.No children involvedIf you have no children, your need for life insurance may be reduced after a divorce; you may have fewer financial obligations and fewer assets to protect. Before you think about discontinuing or surrendering your policy, consider the consequences. Your reduced need for insurance may be temporary. You could always re-start and have a family that is financially dependent on you. Remember that the cost of your insurance policy increases with your age, and your health could change, making it more difficult to get coverage later.Ex-spouse is nomineeIf your ex-spouse was nominated as the beneficiary of your life insurance policy, you probably want to change this nomination. If you do not make the necessary changes and re-marry, your current spouse may not get the insurance proceeds. This could happen if your ex-spouse argues that he or she was the spouse at the time the policy was purchased. To avoid such issues, please change the designation of your nominee.Some questions to consider when calculating your level of life insurance coverage: Divorce and childrenWhen children are involved in a divorce, the need for life insurance usually increases. If you expect to receive child support or alimony to make ends meet, protecting those payments with life insurance is critical. - If your child or children are living with you, ensure that the life of your ex-spouse is insured and you or your child is the nominee, to continue receiving the financial support.- Even if your children are not living with you, you should insure the life of your ex-spouse. If she or he dies, you would probably be in charge of your children. This could increase your expenses, so do consider insuring your ex-spouse.Things you can do about your divorce and life insuranceHere are a few things you can do about your divorce and life insurance, to protect your and your children's financial future:Purchase a new policy on the life of your ex-spouse Purchasing a life insurance policy on your ex-spouse is perhaps the easiest way to protect yourself. However, you could have problems in paying the premiums, or your ex-spouse may not co-operate to do the necessary medical examinations and tests. You could help solve the problem by nominating the children as the beneficiaries.Have existing policies transferred to you If your ex-spouse has an existing policy on his/her life, you could ask her/him to designate you as the nominee, to provide protection of your alimony and/or your child support payments. Jointly agree to purchase and pay for your children's policiesIf both the parents are concerned about their children's higher education needs, they could buy policies in their children's names. Designate your children as beneficiaries of your life insurance policy If you or your spouse are uncomfortable with the idea of having each as the nominee on the insurance policy, consider naming your children instead.
CARE OF PARENTS
With today's medical technology, individuals are living longer than ever before. Yet, more and more people lose the ability to care of their health once they reach their 60s and 70s. In many cases, wealth has been used up for the family's welfare and there is little a pension can support. Once the roles are reversed, they will need you to be around and take care while you will work for your family as well as them. This could entail as little as helping them with their household chores to as much as looking after their financial well-being. If you are responsible for your parents' financial well-being, insurance could help you play the role better. Insurance and Care of ParentsTypically, divorce raises a number of issues regarding life insurance. If you have a life insurance policy already, you may want to re-evaluate your coverage and change your nominee. Your divorce may have left you with fewer assets or more people to protect in the event of your premature death. Because of the impact divorce can have on your finances, your need for life insurance will most likely change. The impact will be greatest when there are children involved.
LOSS OF A LOVED ONE
When your spouse or a parent dies, you need to handle numerous issues in addition to the legal and financial matters. Even if you have been handling your family's finances, you may be overwhelmed by the number of matters you have to settle in the time that follows your loved one's demise. While some matters could be put off for a while, insurance policies should probably be addressed with minimum delay.Insurance and Loss of a Loved OneLife insurance benefits are not automatic. If you or your family members are the beneficiaries of a policy insuring your parent or spouse's life, you may have to locate your agent, locate the policies and go through a heap of paperwork to get the claim filed.
Moreover, now that your loved one is gone, you may also have to reevaluate your own coverage and/or revisit your previous beneficiary designations.After losing a loved one, you have two basic concerns related to life insurance:-- Collect insurance proceeds due to you as beneficiary- Review your own coverage and beneficiary designationCollect the proceeds of a life insurance policy The more urgent of the two concerns is the collection of life insurance benefits. Life insurance benefits are not automatic. If you are the beneficiary of a life insurance policy, you must file a claim in order to receive any money. Filing a claim may be as easy as calling your insurance agent, locating the life insurance policies, filling out some forms and submitting certificates such as a death certificate, but sometimes it may involve a little more work. Review your own coverageYour second concern related to life insurance involves your own needs now that your loved one is gone. It is possible that your insurance need has changed by now. If your loved one was working, you may have lost a source of income, and your insurance need may now be higher. On the other hand, it is possible that your insurance need is reduced with one less dependent to support. This may be the time to re-examine your life insurance policy and how it will fit into your new financial picture. Talk to your agent or financial advisor about your choices.Change the nominations where your loved one was designatedYou should review your beneficiary designations at this time. If your deceased loved one was the nominee in your policy, you should update your designation.
CHILDREN'S HIGHER EDUCATION
I want my child to be a Software Engineer! A Doctor! An Architect! An MBA! I want him to go abroad for further studies! I want her to be financially independent! I want him to do something on his own! If you identify with the above statements or have similar thoughts, do something about them, NOW!You may be surprised to know that college or tuition fees for graduating in a specialized discipline can be as expensive as buying a house in a suburb in Mumbai or buying a big car. If your wish to start planning or saving for your child's education expense in advance, it always helps to look at insurance as one of the investment avenues. It is a guaranteed product that delivers at the time your child needs the money, whether you are there or not. Insurance and Your Children's Higher EductionIf you are like most parents, the least you want to do is to educate your children properly. You would not want to risk your child's opportunity for (higher) education, by failing to plan for the future, would your child be able to go for her or his higher education or would they be burdened with the fact that someone needs to takeover the responsibility of being the breadwinner urgently? Unfortunately, this scenario is common in families without sufficient life insurance.Life insurance provides not only a death benefit to take care of your family's day-to-day expenses but also provides you or your child with money for higher education (or other expenses), in your presence or absence.A child is someone who is totally dependent on you - physically, financially and morally. If something were to happen to you in your child's early years, it would be a major hindrance for her/him. It is always wise to consider the consequences of your untimely demise. The objective of an insured parent should be to provide for his family's every day needs as well as provide for his child's future expenses such as education and marriage. Many insurance policies provide money to you or your child when they are in the age group of 18-26 years. How much life insurance do you need? There are two ways of providing for your children- You insure yourself for a large sum that provides for your children's future expenses, along with the rest of your family's expenses, in the event of your early demise.- In addition, you provide for your child's future expenses through an insurance policy (in addition to other investments that you may be making) that will ensure she/he receives money at the age you want them to, in your presence or absence.Some questions to consider when calculating your level of life insurance coverage: - What are your financial goals? In terms of your present requirements, your savings, your financial aspirations - in terms of buying a car, or owning a house if you are living in a rented home, etc. - In order to reach your goals, what other financial planning strategies do you have in place? For example, if you are planning to buy a house after 2 years, then how much money will you need to make a down payment (if it is financed through a loan)? Can your investments be liquidated at that point in time?- Do you want only enough insurance for your survivors to get by financially, or do you want to have enough to encompass higher education and/or spouse's retirement requirements?What should your children's policy cover you for?If you are the parent/guardian who is going to pay premium for your child's policy, ensure that your policy offers you- Waiver of premium - In the event of your death or an accident that disables you permanently, this clause is available to the insured parent, where no further premiums need to be paid.- Money guaranteed at a certain age - The objective of a children's policy is to ensure that the child receives a certain lumpsum amount of money at a fixed age. Hence, if the parent dies at an early age, the policy should continue, where no further premiums need to be paid and the child should still receive a fixed sum of money at a particular age.- Policy should not cease upon death of the insured parent or guardian - Few policies offer the sum assured plus the bonus for the term and discontinue the policy from thereon. Please ensure that if the objective of your purchasing a policy is to provide your child with money at a certain age, your policy does not discontinue in the event of your early demise.
When your spouse or a parent dies, you need to handle numerous issues in addition to the legal and financial matters. Even if you have been handling your family's finances, you may be overwhelmed by the number of matters you have to settle in the time that follows your loved one's demise. While some matters could be put off for a while, insurance policies should probably be addressed with minimum delay.Insurance and Loss of a Loved OneLife insurance benefits are not automatic. If you or your family members are the beneficiaries of a policy insuring your parent or spouse's life, you may have to locate your agent, locate the policies and go through a heap of paperwork to get the claim filed.
Moreover, now that your loved one is gone, you may also have to reevaluate your own coverage and/or revisit your previous beneficiary designations.After losing a loved one, you have two basic concerns related to life insurance:-- Collect insurance proceeds due to you as beneficiary- Review your own coverage and beneficiary designationCollect the proceeds of a life insurance policy The more urgent of the two concerns is the collection of life insurance benefits. Life insurance benefits are not automatic. If you are the beneficiary of a life insurance policy, you must file a claim in order to receive any money. Filing a claim may be as easy as calling your insurance agent, locating the life insurance policies, filling out some forms and submitting certificates such as a death certificate, but sometimes it may involve a little more work. Review your own coverageYour second concern related to life insurance involves your own needs now that your loved one is gone. It is possible that your insurance need has changed by now. If your loved one was working, you may have lost a source of income, and your insurance need may now be higher. On the other hand, it is possible that your insurance need is reduced with one less dependent to support. This may be the time to re-examine your life insurance policy and how it will fit into your new financial picture. Talk to your agent or financial advisor about your choices.Change the nominations where your loved one was designatedYou should review your beneficiary designations at this time. If your deceased loved one was the nominee in your policy, you should update your designation.
CHILDREN'S HIGHER EDUCATION
I want my child to be a Software Engineer! A Doctor! An Architect! An MBA! I want him to go abroad for further studies! I want her to be financially independent! I want him to do something on his own! If you identify with the above statements or have similar thoughts, do something about them, NOW!You may be surprised to know that college or tuition fees for graduating in a specialized discipline can be as expensive as buying a house in a suburb in Mumbai or buying a big car. If your wish to start planning or saving for your child's education expense in advance, it always helps to look at insurance as one of the investment avenues. It is a guaranteed product that delivers at the time your child needs the money, whether you are there or not. Insurance and Your Children's Higher EductionIf you are like most parents, the least you want to do is to educate your children properly. You would not want to risk your child's opportunity for (higher) education, by failing to plan for the future, would your child be able to go for her or his higher education or would they be burdened with the fact that someone needs to takeover the responsibility of being the breadwinner urgently? Unfortunately, this scenario is common in families without sufficient life insurance.Life insurance provides not only a death benefit to take care of your family's day-to-day expenses but also provides you or your child with money for higher education (or other expenses), in your presence or absence.A child is someone who is totally dependent on you - physically, financially and morally. If something were to happen to you in your child's early years, it would be a major hindrance for her/him. It is always wise to consider the consequences of your untimely demise. The objective of an insured parent should be to provide for his family's every day needs as well as provide for his child's future expenses such as education and marriage. Many insurance policies provide money to you or your child when they are in the age group of 18-26 years. How much life insurance do you need? There are two ways of providing for your children- You insure yourself for a large sum that provides for your children's future expenses, along with the rest of your family's expenses, in the event of your early demise.- In addition, you provide for your child's future expenses through an insurance policy (in addition to other investments that you may be making) that will ensure she/he receives money at the age you want them to, in your presence or absence.Some questions to consider when calculating your level of life insurance coverage: - What are your financial goals? In terms of your present requirements, your savings, your financial aspirations - in terms of buying a car, or owning a house if you are living in a rented home, etc. - In order to reach your goals, what other financial planning strategies do you have in place? For example, if you are planning to buy a house after 2 years, then how much money will you need to make a down payment (if it is financed through a loan)? Can your investments be liquidated at that point in time?- Do you want only enough insurance for your survivors to get by financially, or do you want to have enough to encompass higher education and/or spouse's retirement requirements?What should your children's policy cover you for?If you are the parent/guardian who is going to pay premium for your child's policy, ensure that your policy offers you- Waiver of premium - In the event of your death or an accident that disables you permanently, this clause is available to the insured parent, where no further premiums need to be paid.- Money guaranteed at a certain age - The objective of a children's policy is to ensure that the child receives a certain lumpsum amount of money at a fixed age. Hence, if the parent dies at an early age, the policy should continue, where no further premiums need to be paid and the child should still receive a fixed sum of money at a particular age.- Policy should not cease upon death of the insured parent or guardian - Few policies offer the sum assured plus the bonus for the term and discontinue the policy from thereon. Please ensure that if the objective of your purchasing a policy is to provide your child with money at a certain age, your policy does not discontinue in the event of your early demise.
RETIREMENTS
Retirement is a good time to re-assess your life insurance needs to ensure that they accurately reflect your new stage in life. Because you may no longer want your insurance to replace your salaried income, nor do you have any loans or liabilities and nor do you have to worry about providing for your children's higher education and marriage expenses (hopefully). In fact, you may now be focused on being financially independent - ensuring that you and your spouse are not dependent on your children for your finances at least.Insurance and RetirementsWhen you retire, it is time to re-evaluate your insurance coverage. Because your financial responsibilities and priorities are changing, your insurance needs change as well. Your monthly income declines as you stop earning your salary. Your household expenditure declines as you incur lower expenses on commuting, clothing and eating-out. You may be in a lower income tax bracket. With so many changes in your financial position, you need to ensure that your avenues to retirement are as secured as your life has been.Pension products- Insurance companies offer pension products that allow the individual to receive pension immediately or to receive pension at a certain age. - During the term of the policy, the individual remains insured.- Upon his death, his spouse or nominee have the option of either receiving a monthly pension for a guaranteed term (which would have been selected by the insured) or receiving a lump sum amount, where the policy ceases. - Usually these policies allow individuals to pay money on a regular basis as premium or even accept single premiums, where only one payment is made.- Moreover, some of the pension policies offer tax benefits, under section 10CCC, which are not available on any other products.- However, keep in mind that the premium paid for such a policy may offer tax benefits, the money received as pension is subject to being taxed.Attained Retirement! Almost?If you have just reached retirement or are just about to retire in the near term, and are still making plans to sort your finances, here are a few points that you may consider
Sort out all your savings from various sources
Create an account of your receivablesThe lump sum amount of money receivable amount over a period of time- Employer's Provident Fund- PPF money that may have accumulated over the years- NSC, Infra-bonds, FDs that may be ready to mature- Insurance policies that are likely to mature soonThe money you expect to receive on a regular basis such as- Pension from your annuity policies- Pension from your ex-employer- Income from your Regular Income FundsEstimate your expenses Create an account of your anticipated expenses (hopefully, you have no loans or liabilities)- Monthly household expenditure- include a 10% buffer for unexpected medicine bills- Contingency fund for the month (an unexpected holiday to your grand-daughter's birthday party or a sudden fit to go on a pilgrim with your neighbor)Ensure that your expenses include money for routine medical check-ups, insurance payments, entertainment / vacation savings (in the same order of priority). Contingency fund - Create a contingency fund for you and your spouse, which could be used in case of any sudden medical needs.Health insurance - Ensure that you and your spouse remain covered through a health insurance policy. Also, ensure that the amount you are covered for is not a small amount such as Rs 25,000 or Rs 50,000. Pension products - Ensure that your spouse can deal with your monthly expenses, in your absence, through the pension that you receive. If you are not insured for the same, you could still do that through pension products that offer pension immediately.Well, if you have most of the above in place, all you need to do is put your feet and relax!!! Have a nice time!!!
Retirement is a good time to re-assess your life insurance needs to ensure that they accurately reflect your new stage in life. Because you may no longer want your insurance to replace your salaried income, nor do you have any loans or liabilities and nor do you have to worry about providing for your children's higher education and marriage expenses (hopefully). In fact, you may now be focused on being financially independent - ensuring that you and your spouse are not dependent on your children for your finances at least.Insurance and RetirementsWhen you retire, it is time to re-evaluate your insurance coverage. Because your financial responsibilities and priorities are changing, your insurance needs change as well. Your monthly income declines as you stop earning your salary. Your household expenditure declines as you incur lower expenses on commuting, clothing and eating-out. You may be in a lower income tax bracket. With so many changes in your financial position, you need to ensure that your avenues to retirement are as secured as your life has been.Pension products- Insurance companies offer pension products that allow the individual to receive pension immediately or to receive pension at a certain age. - During the term of the policy, the individual remains insured.- Upon his death, his spouse or nominee have the option of either receiving a monthly pension for a guaranteed term (which would have been selected by the insured) or receiving a lump sum amount, where the policy ceases. - Usually these policies allow individuals to pay money on a regular basis as premium or even accept single premiums, where only one payment is made.- Moreover, some of the pension policies offer tax benefits, under section 10CCC, which are not available on any other products.- However, keep in mind that the premium paid for such a policy may offer tax benefits, the money received as pension is subject to being taxed.Attained Retirement! Almost?If you have just reached retirement or are just about to retire in the near term, and are still making plans to sort your finances, here are a few points that you may consider
Sort out all your savings from various sources
Create an account of your receivablesThe lump sum amount of money receivable amount over a period of time- Employer's Provident Fund- PPF money that may have accumulated over the years- NSC, Infra-bonds, FDs that may be ready to mature- Insurance policies that are likely to mature soonThe money you expect to receive on a regular basis such as- Pension from your annuity policies- Pension from your ex-employer- Income from your Regular Income FundsEstimate your expenses Create an account of your anticipated expenses (hopefully, you have no loans or liabilities)- Monthly household expenditure- include a 10% buffer for unexpected medicine bills- Contingency fund for the month (an unexpected holiday to your grand-daughter's birthday party or a sudden fit to go on a pilgrim with your neighbor)Ensure that your expenses include money for routine medical check-ups, insurance payments, entertainment / vacation savings (in the same order of priority). Contingency fund - Create a contingency fund for you and your spouse, which could be used in case of any sudden medical needs.Health insurance - Ensure that you and your spouse remain covered through a health insurance policy. Also, ensure that the amount you are covered for is not a small amount such as Rs 25,000 or Rs 50,000. Pension products - Ensure that your spouse can deal with your monthly expenses, in your absence, through the pension that you receive. If you are not insured for the same, you could still do that through pension products that offer pension immediately.Well, if you have most of the above in place, all you need to do is put your feet and relax!!! Have a nice time!!!
