You’re retired. Your kids are self-sufficient and the house is paid off. There’s really no reason to continue carrying a life insurance policy, right? After all, life insurance is intended to replace lost income when the policyholder dies. If you’re no longer working, there’s no income to replace.

However, before you let your policy lapse, it’s important to consider your unique financial picture. There are plenty of exceptions for which continuing to be covered by insurance into your 60s and beyond might make sense.

Government pension or Employees Provident Fund (EPF) can be an important source of retirement income but it may not be sufficient to finance your total retirement needs. What if you outlive your financial resources?

A survey by EPF showed that majority of contributors spent all their savings within three years of withdrawal upon retirement. As such, you may need to supplement your retirement savings. One way of doing this is to use annuities to provide you with a stream of income during your retirement years.

The most important aspect of approaching the purchase of insurance in retirement is realising that you have a set amount competing for potential priorities such as: larger home, more travel, bigger inheritance, leave a safety net for medical expenses, and so on.

It is important to check all the options offered by various insurance companies before you buy the annuity plan that best suits your needs. The type of annuity you choose and its benefits will determine the amount of income you will receive during retirement. You can choose to have your income paid every month, every three months, every six months or once a year.

It is highly recommended to start saving as early as possible during your working years to build enough funds to provide you with a financially comfortable retirement. Even if you have a savings arrangement that enables you to do so, it is still even more beneficial to purchase an annuity to help you financially through retirement.