Why life insurance a smart tool for retirement planning

DAR ES SALAAM: ACCORDING to FinScope Tanzania 2023 Survey, 28 per cent of Tanzanian adults aged 55 years and below have no retirement plans.

Data from the survey also shows that 8 per cent of people expect their children to take care of them when they retire while 2 per cent depends on money from family and friends.

When planning for retirement, most people focus on savings accounts, pensions, and investment vehicles. While these are important, life insurance is an often-underestimated tool that can bring both security and financial flexibility to a well-rounded retirement plan.

Life insurance goes beyond providing a death benefit. These policies build cash value over time, which policyholders can borrow against or withdraw during retirement.

This feature can act as a financial cushion, providing tax-advantaged funds when market investments are underperforming or when unexpected expenses arise.

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Moreover, life insurance helps retirees manage one of the biggest financial risks in later life: longevity; By offering a predictable benefit to heirs or a spouse, life insurance can ensure that estate plans remain intact and that surviving dependents aren’t left in financial hardship.

For those who rely on two incomes or where a pension may stop at death, this coverage becomes especially critical. For instance, the Jubilee Life Insurance offers customers a variety of life insurance products designed to support long-term planning goals, including those tailored for retirement.
Another key advantage lies in legacy planning; Life insurance enables retirees to leave a guaranteed inheritance ordinate to a cause they care about this allowing more of their accumulated wealth to go where they intended.

Some life insurance plans also offer living benefits, including coverage for critical illness or long-term care. This can help preserve retirement savings by covering high medical costs that might otherwise wipe away hard-earned assets.

In summary, life insurance is not just a risk management product—it’s a financial planning solution. It complements traditional retirement tools by offering protection, liquidity, and peace of mind. When structured properly, it helps retirees live with greater confidence and leave a lasting impact for generations to come.

The author is the Head of Operations at Jubilee Life Insurance Corporation