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Why investment insurance is not for seniors

The life insurance industry offers a variety of products to seniors, but the most common is voluntary retirement insurance. The important event in this policy is reaching retirement age.
Why investment insurance is not for seniors

Each person can independently determine the period when the pension is to be paid:

Life annuity: choose the date which you will start receiving payments from. If something happens to you, the rest of your pension will be paid to whoever you assign - your spouse or other close relative.

Fixed-term pension: indicate a certain period when you want to receive an additional pension, for example, from 65 to 70 years old.

Investment insurance is a combination of insurance and investments. Savings are divided into two following parts:

  • A guarantee part (usually no more than 10% of investments in the USA) will ensure the return of your money if the situation on the stock market is unfavorable. How much of your savings is protected depends on the contract.
  • An investment part (most of the investments) can provide additional return but it is not guaranteed. The insurer will offer you a choice of several investment programs.

Investment life insurance for seniors has its downsides. One is that it can be more expensive than other types of insurance since the risk of insured event for older people is higher. Besides, investment life insurance may have more stringent repayment terms than other types of insurance, for example, voluntary health insurance. It should also be taken into account that investment life insurance does not guarantee the return on invested funds and has the risk of losing part or the whole investment amount. Therefore, before choosing investment life insurance, you must carefully study all the terms and risks associated with this type of insurance.

Source: https://www.businessinsider.in/personal-finance/news/mis-selling-trap-why-ulips-are-not-for-senior-citizens/articleshow/105463058.cms

Photos are from open sources.

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