FOR many, life insurance is associated with illness and death, but according to Kerry Ann Chong, senior manager, sales and service, Scotia Jamaica Life Insurance Company, a good policy is an important element in any strategic retirement plan.

“Life insurance is meant to protect families from loss of income. A good life insurance policy does not only provide your loved ones with peace of mind in case of your untimely passing, but it should also take care of your own needs once you retire. So having an insurance policy with the options for payouts allows you to receive some income during retirement,” Chong explained. She added that those who will retire with debt from various sources such as mortgages, education, or just basic family needs, should invest in life insurance that offers benefits at the end of their work life.

Assess insurance benefits before you retire

Before retirement, you should review the features and benefits of any individual or group insurance policy provided by your employer to ensure you have the proper protection that insurance affords.

“Many people get life insurance as an employee benefit where they work, however, it is not always sufficient for their family and many will not retain it as a benefit upon retirement, so the employee should try to supplement the life insurance they get from their employer by purchasing an individual policy,” Chong advised. She said some retirees may have considerable assets and can use life insurance strategically to take care of estate taxes or pay off business or other debts.

Keep your policy up to date

As a policyholder ages, there might also be significant life changes. An annual review should be done of all life insurance policies to ensure beneficiaries are current and premiums are up to date.

“We always urge our customers to set aside some time at the start of each year or during an anniversary of their choice to check on their policies and ensure that the beneficiaries are up-to-date. If there has been a divorce, for example, the policyholder may want to remove their previous spouse if they no longer want them to benefit. If they have adult children whom they have helped financially or given assets, they may want to look at how the proceeds of the policy are apportioned.”

Opt for policies with a cash value

A policy with a cash surrender value allows an insured person to accumulate a cash value as a way to save for the future and to augment any pension payments. Chong says Scotia Insurance’s ScotiaMINT gives protection in the form of life insurance as well as savings and customers enjoy tax-free savings of up to a million dollars annually if funds remain for five years. An affirm policy also provides insurance coverage and investment across various funds — income, money market and growth. Also, having a whole life policy which provides life insurance coverage for the life of the insured plus a cash value is also strategic for retirement.

“It’s never too late to start a policy but the earlier you start, the lower the monthly premiums are and the more affordable life insurance is. Heading into retirement, an evaluation of your income is key to ensuring that premiums can be maintained until the policies mature or are paid out. The coverage benefit should also be assessed to ensure that it will cover estate planning needs and provide a death benefit to beneficiaries,” said Chong. There are substantial financial benefits to life insurance policies, she said, as they can be an important source of supplemental income when an individual retires.