There are no fixed criteria for what age we should start applying for life insurance. Some people think about having life insurance when starting their career while some are close to their retirement period.

Finally, having life insurance is up to “financial readiness” or the ability of each individual to pay the insurance premiums. Thus, the right age to start applying for life insurance is at “age-ready”, and readiness means you are ready for yourself, or you may also be ready to provide insurance for your loved one.

When talking about insurance for retirement age, it’s likely to be Annuity life insurance as its clear objective is life protection that generates savings for spending at the end of life. The pattern of insurance policy is available in long term from 10 years and over, or insurance with retirement policy that provides returns to the Insured after retirement. Payment can be one-time cash like Pension or a pay period like Annuity.

Annuity life insurance helps planning for retirement but many people may wonder if it’s worth paying it. The returns may be low and protection coverage is moderate so this type of insurance is not suitable for those who need high insurance costs to protect money burden. Even though Annuity life insurance has limitations, it provides remarkable benefits differently from other insurance that is regular returns after retirement or after paying a premium. Therefore, the Insured will gain consecutive income after retirement, or receive regular income like when they are working (Source: Thai Financial Planners Association).

The methods to choose Annuity life insurance are not different from other types of insurance. Basically, you should follow these steps.

1. Determine the objective of having life insurance by targeting the expected goal or outcome from insurance, such as you want to gain savings for spending after retirement at the age of 60 for 20,000 Baht per month.

2. Choose proper life insurance whose policy offers protection coverage, and payment and benefit conditions match your need the most, such as Annuity life insurance which is best for those who want to save money for retirement.

3. Calculate the amount of sum insured by choosing it according to your need and ability to pay its premium.

4. Choose a reliable insurance company. Comparing insurance policies with a variety of companies so that you will get the policy that fits your need and the potential to pay a premium.

5. Apply for insurance by making direct contact with the insurance company. In case you contact an insurance agent, please ask for Insurance Agent License. Fill in details completely and pay a premium on time. When receiving an insurance policy together with a receipt, check them carefully and then inform the Beneficiary thoroughly.

Example: Calculation of Retirement Payout

Currently, you are at the age of 40 and want to apply for an Annuity life insurance with a sum insured at 100,000 Baht, premium payment for 20 years until you are 90 years old. Benefits will be paid 24% of the sum insured.

Under the policy of Annuity life insurance with a sum insured at 100,000 Baht, you will pay a premium every year for 20 years for a total of 150,000 Baht per year (suppose insurance premium rate is 150 Baht per the sum insured at 1,000 Baht). That means from the age of 40 – 59, the total premium you have to pay is 3,000,000 Baht throughout the contract. 

After that, you will receive an annuity every year for a total of 24,000 Baht per year from the age of 60 to 90 as planned, equivalent to a total benefit of 720,000 Baht. 
 

You will see that Annuity life insurance is another choice for saving money to spend during retirement even though the premium is quite high. It’s a good way to force yourself to create savings so you are certain that you can live a stress-free life after retirement.