One thing to keep in mind, is that just because you have retired, this does not mean that you no longer need your life insurance policy. According to experts at companies like Colonial Penn, there are many reasons why you need to keep your life insurance policy intact. For example, perhaps your retirement investments did not produce as expected, maybe you have been forced into early retirement, or perhaps you are trying to make sure you have enough coverage for your funeral expenses. With more and more couples waiting to have children these days, maybe you still have kids at home. In addition, having a mortgage, other debts, or an elderly loved one at home counting on you, there still can be a need for that extra support. In other words, if you have loved ones, owe money, or anyone else who depends on you financially, these things are not going to disappear the moment you retire.
Will You Still Need the Same Coverage?
If the original reason for buying life insurance was to replace your income and protect your family by increasing your investments, you may no longer need it. But, then again, if you have your money tied up in investments where taxes must be paid when your survivors close the accounts, inheritance taxes that must be paid, and many other expenses. These might include probate and administration costs, perhaps you have debts or a mortgage that must be paid off. You need to make sure your life insurance coverage continues to be enough to take care of these expenses and still leaves your surviving family in a financially stable position.
Can You Still Buy Life Insurance if You Have Already Retired?
Just because you have reached retirement age, this doesn’t mean you can no longer buy life insurance. Consider this, your estate is worth more than the current amount of your federal tax exemption, leaving your family with taxes that must be paid. By investing in a life insurance policy, you provide your family with a way to pay these taxes and more. The same applies if you took a cash payout on your retirement that left nothing in the way of a survivorship provision, taking out a life insurance policy will help ensure your spouse is properly taking care of in the event of your death. Just keep in mind that life insurance premiums increase as you get older, so while you are able to purchase a plan after you have reached retirement age, the monthly payments could be significant.
Anything Else Might be Missing?
Most people don’t fully understand the benefits of having a life insurance policy in place. For example, you have been diagnosed with a terminal illness, but you don’t have enough money in your savings account to cover the medical and non-medical bills. If you choose an “accelerated death benefit” provision, you should be able to contact your insurance company and withdraw money from your policy to help cover your expenses and help you avoid having to file for bankruptcy protection. The good news? Investing in a permanent life insurance policy pays better rates than many CDs and savings accounts. It represents a very safe way to invest your money with zero risk and at the same time assuring your family through a very difficult time when it’s needed most.