Many retirees have reached a point of financial security and may not consider life insurance as important. Others may feel that they do not qualify or cannot afford to pay the premiums. There is also a misconception that life insurance is only for young families, dependents or those with significant debt.
While some people are certainly more likely to see the need for life insurance than others, there are still many benefits to life insurance for retirees.
What are the benefits of life insurance for retirees?
Everyone’s financial situation is different, but Insurance There are several valuable features that can benefit retirees. It is important to remember who life insurance is not for Youinsured, is for your beneficiary, The executors of your estate may have to pay funeral expenses, debts and taxes after you pass away. Your partner or children may find themselves without enough income to cover those costs, especially if they are financially dependent on you.
cover final expenses
Funerals, or celebrations of life, can be expensive. Costs will vary depending on the services provided, but the average cost of a funeral in the United States last year was was around $8,000,
Going through the last rites and funeral of a family member or close friend is difficult enough without worrying about how you’re going to pay for it. Having life insurance to cover those expenses can ease the financial burden on your loved ones and give them space to grieve.
pay off outstanding debt
About 20% retired still take a mortgage, and about 67% carry Credit card debt in retirement. Some may sell their home, downsize and use the remaining money to supplement their other sources of income; Others can get a reverse mortgage or home equity line of credit on their home.
Viewing life insurance as a financial tool is a great way to reduce your stress and help you feel more prepared for retirement and your future. If you pass away, any debt you have will still have to be repaid. However, the proceeds from the life insurance policy can help your loved ones pay off any outstanding loans or bills you may have.
provide financial support
If you have a partner, he or she may not receive the pension income that you received before you died. Some pensions provide a reduced percentage for a surviving partner, and some only provide pension funds for a specified amount of time. If you die, this could result in a reduction in your partner’s income. You may also have dependent children or other people in your life who need financial support. Life insurance can provide a source of income replacement for your dependents and help maintain their lifestyle.
support a charitable cause
If giving back and contributing to something greater than yourself is important to you, life insurance can be a great way to do that. Many people are passionate about a cause or charity. Did you know that life insurance can provide income generous donation to an organization of your choice? You can also use the death benefit to create an ongoing legacy, such as a scholarship.
provide tax-free benefits
Life insurance proceeds are generally tax-free. Other parts of your estate may be subject to taxes, reducing the amount of money available to your beneficiaries. A life insurance policy can help cover the taxes owed, so your beneficiaries receive their entire inheritance.
Deciding Whether You Need Life Insurance
When considering life insurance, there are two main things to review: how much you need and what it will cost. using a life insurance calculator can help you determine the amount of life insurance coverage that is right for your family. Once you have completed the calculator, you should compare life insurance policies to ensure that you get what best suits your needs. A qualified insurance professional can help you get started.
Peace of mind is just one of the many benefits a life insurance policy offers to people retiring. Insurance proceeds can provide ongoing income to your beneficiaries, cover funeral expenses, pay debts and help you leave an inheritance. A life insurance policy can be a great way to ensure that your loved ones are taken care of when you pass away.