Growing old is not something we look forward to. However, it is inevitable. Even though retirement is considered to be a time when we can enjoy all the savings we have accumulated throughout our career, the prospect of leisure can be disrupted by health issues and medical expenses that plague human beings in their old age. You should plan for retirement when you get married to protect your spouse from the uncertainties of life.
Treatments and surgeries for ailments that develop from old age, like cataracts, heart/kidney issues, etc., can range anywhere from Rs. 8,000 to Rs. 1,80,000. This is why it is essential that we plan out and save some money for such expenses after our earning period is over. Proper retirement planning in India is essential to prepare for the worst-case scenarios once you are old.
How much should you for Contingency Expenses during your Retirement
Planning out your retirement budget will depend on your income after your career and a rough estimate of how much you would spend on a monthly basis. While this sounds simple enough, many adults find themselves unprepared and terrified when the reality of old age hits them, especially if they did not purchase a retirement plan when the time was right.
You have several options to choose from when it comes to a pension plan/retirement plan, and government employees and many semi-government offices provide pensions that can cover day to day expenses of the retirees.
But this small sum may prove to be insufficient in the case of a medical emergency, which is why it is pivotal that you include contingency expenses in your retirement budget. A lot of thought should go into the calculation of this amount, including your lifestyle, any genetic diseases you may develop, as well as any pre-existing health conditions that your doctors have warned you about.
The healthier you are and have been, the less money you need to dedicate for contingency and health care expenses. At the same time, however, a healthier way of life also means you will live longer - you will need to plan for a longer life expectancy, which would increase the sum total of the contingency budget.
Are there any Alternatives to Health Insurance Plan for Managing Medical Expenses?
Another mistake most people make when planning out their retirement is putting too much faith in their health insurance. Most health insurance plans do not cover long-term care and will only allow limited healthcare spending after retirement. As one grows older, one may start developing age-related disorders that require daily medication but do not require hospitalization.
Because so many health insurance policies are designed to cover emergency hospitalization or surgical requirements, they usually require additional payments and drivers to cover the costs of regular prescription drugs and medication, which is what the elderly usually need coverage for.
Old age also comes with the gradual deterioration of many organ systems in the body, such as the eye or the buccal cavity. People who develop disorders like cataracts or face dental issues are distraught to find that health insurance policies may not cover these expenses - your contingency plan must take into account such possibilities so that you need not pay these expenses on an impromptu basis.
It is also a good idea to investigate the history of your family so that you can be prepared for any genetically driven disorders you may develop later in life. For instance, if your family has a history of having bad dental health, you can purchase a stand-alone dental insurance plan that covers expenses for root canals, tooth replacements, etc.
Starting a fixed-deposit savings account where you save money just for your future health care expenses is also a good idea. But one of the best ways to work your way around these loopholes that exist in health insurance policies is to invest in a good quality retirement plan that guarantees enough monthly income to prepare you for any healthcare contingencies that may come your way.
Insurance Plans to Safeguard your Retirement Plan
Canara HSBC Oriental Bank of Commerce Life Insurance has recognized the necessity for a reliable and affordable retirement and pension plan in India. They have various insurance policies that can help you prepare yourself for any unprecedented events:
1. Invest 4G Plan
This highly flexible retirement plan is customizable according to your financial goals and future requirements. Here are a few benefits customers enjoy when they purchase this Unit-Linked Insurance Plan:
- Guaranteed regular income so that you can be completely self-sufficient in the face of adversity.
- Life insurance coverage that protects any and all dependents in case of your unfortunate demise.
- Flexibility to manage and control your savings according to your preference, choosing from eight different unit-linked funds.
- Receive fund value as a lump sum or as periodic settlements upon reaching maturity.
- Reduction in Premium after the first five completed years of policy premium payment.
- Return of mortality charge added to the fund value upon reaching the date of maturity.
- Milestone Withdrawal Option and Systematic Withdrawal Option so that you can liquidate your savings after a certain number of policy years have been completed.
- Tax benefits based on the prevailing income tax laws.
Pension4Life Plan help senior citizens plan for a safe and comfortable retirement without depending on anyone else. This pension plan offers a regular stream of income after your working years are over, with a defined annual installment in exchange for a fixed purchase price.
The product offers seven different options for an annuity, with a special option for Family Income for subscribers of the National Pension System. There are several benefits to this plan, some of which include:
- The death benefit can cover the costs your family may need after your death.
- A loan facility under one of the annuity options
- A higher annuity installment if the policyholder can pay a higher purchase price.
It is essential for any working citizen to begin preparations for their retirements at an age where they are earning, and a reliable retirement and pension plan in India is an important component of a financially independent individual’s financial portfolio.