Do seniors still need life insurance after they retire? After all, the kids are gone and you’re ready to take it easy. So why pay those premiums? But before you cancel your policy, you might want to read this blog. You might find that retirees need life insurance.
Are you almost ready to retire? Are you looking forward to soaking up the sun on some tropical island, and living out your senior citizenry in comfort and security? If you’re financially secure and are looking forward to a worry-free retirement, you might be asking yourself: “If I’m set for life, do I still need my life insurance policy?”
In a recent Wall Street Journal article, writer Cheryl Winokur Munk suggests that before you cut up your life insurance policy, you should first do a deep dive into your personal financial situation. Ms. Munk recommends that you should look at several factors before grabbing that pair of scissors. These factors include:
• Personal debt load
• Present financial obligations
• Your overall health
• Income-replacement needs
• Your life expectancy
• Potential liquidity issues
• Your tax situation
• Legacy planning goals
• Charitable-giving projections
Leaving a tax-free legacy for your family with life insurance.
One sensible reason to keep your life policy in force after you retire is to provide financial security to your heirs, including your children and grandchildren. The tax-free money can be used to pay off a home, start a business, fund your grandchildren’s education, and many more worthwhile items.
If augmenting your legacy doesn’t float your boat…what about your funeral costs? Have you seen what the average funeral costs these days? Or what about any outstanding debts? Trust me, there will probably be some outstanding expenditures that’ll need to be paid after you’re gone. So who will have to pay off those debts? Will it be your kids? Your grandkids? The life insurance that you currently own (especially if it’s a permanent life policy) can ensure that these extra costs are not bore on the back of those who are left behind.
And if you don’t presently have life insurance, but you’d still like to ensure that your family won’t have to go into hock to pay the bills you left behind after you die, then perhaps Final Expense insurance might be the way to go. This type of policy have smaller face values (typically $2,000 to $50,000, depending on the individual insurer), but don’t require a medical exam. Plus, the coverage is guaranteed for life.
If you have a pension that’ll automatically be reduced after you die, this is another sound reason to get some life insurance. A life policy can help fill in the financial hole left by your pension reduction, so your spouse doesn’t lose any ground. Losing YOU is enough of a tragedy, without compounding it with a huge hit on the monthly balance sheet.
Use your life insurance for long term care insurance.
Many of today’s policies offer riders that allow you to access your death benefit for long term care…whether it’s for in-home nursing care, or in a nursing home. Even if you own a policy that doesn’t have a long term care component, if you end up spending a good chunk of your net worth in long term care before you die, at least your spouse will receive your policy’s death benefit…delivered income tax-free…to help replace that lost income.
So, does it ever make sense to DROP your life insurance when you retire?
Of course. Here are a few examples:
• You don’t care about anyone else in the world
• Your spouse has already passed on
• You’re divorced
• You have no children
• The premiums are big enough to choke a horse
• You have no interest in leaving a larger legacy for the people you used to care about
So the moral of the story is…if you’re thinking about canceling your life insurance, you might want to consider talking to an insurance professional first. For more information, talk to one of our agents here at AccuQuote. We can provide quality, competitive life insurance quotes from the top-rated, brand-name insurance companies you know and trust. At AccuQuote, we’re here to help.