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How to Maximize Retirement Benefit with Life Insurance

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After years of struggle and coping with the daunting challenges, retirement appears as the light we have been looking for to chill out and enjoy life in full swing. But this can be false dawn if you enter the phase with no planning at all.
Purchasing a life insurance policy is the best decision you can make to maximize retirement benefit. Some plans can earn income for you to meet the financial requirements and, most importantly, to keep you in a good shape.

Here’s a detailed guide on what necessitates a life insurance plan and how you can take maximum advantage of the opportunity.

Why Life Insurance is a Necessity after Retirement in the Modern-Day World?

Recall the time when you were in your early 20s, was living as expensive as today? You must be shaking your head, and that’s precisely why you require an insurance policy. As predicted by the Conference Board of Canada, the health cost will increase in the coming ten years. 
On top of this all, the wave of Covid-19 has further caused the health department to incur significant expenditures, which will, in turn, result in ramping up the cost of living. Besides, old age requires extra medical care. So, to bear all this, you must have a reliable hand to assist. 
* Increased Life Expectancy 
Earlier, turning 60 was taken as bidding farewell to the world. But, thanks to the medical practitioners pondering over new research and treatments, you are going nowhere anytime soon. As data shows, life expectancy in Canada has increased from 71 years in 1960 to 80+ years as recorded in 2018. 
Nonetheless, retirement is inevitable. Hence, preliminary planning to survive after getting retired is essential to prevent outliving your assets. 
* To Remain Independent 
The joint family system has strong roots in Eastern culture. Patriarchal or sometimes even the matriarchal system was followed to earn a living collectively. However, time changes, and so do the social paradigms. 
A surge in the development of nursing homes is the epitome of how younger generations have welcomed a new way of life where they are reluctant to take care of the elderly. Therefore, planning life insurance can save you from facing financial challenges. 
* Pursue your Dreams! 
Have you been longing to travel around the globe? Or spending time serving humanity is your latest interest? Whatever the desire is, you will require money to make it come true. As they say, you reap what you sow; likewise, investing in insurance will allow you to do whatever you covet for.

Ready to Get a Life Insurance Plan? Here’s how you can Maximize Retirement Benefit 

Annuity Plan 

One of the typical schemes to leverage savings is buying an annuity plan. Immediate annuity involves investing a lump sum at once. A fixed amount is then paid to the policyholder every month. The stream continues either for a specified period or for a lifetime. 

On the contrary, deferred annuity works by paying disbursements after a specified period, sometimes even after decades, unlike an immediate annuity, where the income is received right after the contract. Therefore, if you have your retirement around the corner, going with an immediate annuity would be suitable to start receiving monthly, quarterly, or annual incomes. 

The amount of annuity you will receive is decided by considering factors like the age and gender of the annuitant, current interest rates, and the type and period of the plan chosen. However, don’t forget to gather insight before deciding whether the policy is apt for you or not. 

Pension Maximization 

This life insurance strategy is befitting for those with a dependent family member. Pension maximization secures that your spouse or children will have financial support even after your death. This involves investing a small proportion of your pension or annuity in the insurance policy. 

Consequently, by doing so, you are guaranteed that the funding will be returned by granting a survival benefit to the beneficiary. Also, you can follow the same plan to protect Social Security benefits. Hence, if one of the members dies, the other one can continue taking the benefits on their behalf. 

Systematic Withdrawal Plan 

Sustaining the chain of earning revenue out of the nest egg is essential to avoid a shortage of money in the coming future. Purchasing a systematic withdrawal plan keeps the income chain continued even after retirement. The system works by investing money in mutual funds and withdrawing an amount timely to bear household expenditures. 

Depending upon the plan chosen, the withdrawal can be fixed or variable. The fixed withdrawal allows you to fetch a certain amount in monthly or quarterly installments. On the flip side, the variable plan implies offering only the earned appreciation on the invested capital. Thus, keeping your money saved along with providing financial assistance.  

Long-term Care Insurance 

The Canadian population lacks adequate finances required for healthcare, says the research conducted by CLHIA. The study further discloses that 25% of the people will exceed the age of 65 by 2036. Whereas 1 million will be affected by dementia. Such alarming figures say it all why you need care insurance. 

The long-term care insurance plan supports you in multiple ways when hit by an intimidating illness. From covering your medical expenses to providing support in doing daily activities, the plan covers all aspects. The cost, on the other hand, is governed based on the following factors: 

  • Age and health condition 
  • Gender (Women pays less as they have greater life expectancy) 
  • Marital status (low cost for a couple)
  • Coverage (extended coverage demands more cash)

Also, to look after your needs, these services can reach out to your house, nursing homes, or any other care facility, thereby offering the emotional or physical support you might need with ascending age. 

The Bottom Line 

Smartly utilizing life insurance plans can save you from ending up in dire straits. Owing to the changing socio-economic values and health risks associated with old age, a cash crunch can be the final straw to further muddy the waters. However, by foreseeing the upcoming challenges and taking the preliminary measures, you can freely enjoy that phase of life.

To get the best life insurance quotes from top insurance companies in Canada, you can contact Insurance Direct Canada. They are currently one of the most trusted insurance brokers in Canada.

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