Retirement Life Insurance

Many questions arise for people coming to the end of their working life. After years in the workforce, it is natural for people entering retirement to begin making changes to ensure financial security now that income will be fixed. Expenses which were once considered necessary may now be uncalled for, like a second car. Narrowing down the list of bills requires tough decisions, especially when it comes to life insurance. After paying into a policy for so long, is it wise to let it lapse?

It depends on your situation. For the majority of people, the mortgage is paid and the kids have grown up and moved out. Life insurance is intended to provide income protection for dependents while an inpidual is working and, in most cases, as you move into retirement you’ll rely on disbursements from investments and Social Security.

In other words, your income and expenses will likely be fairly steady, so the chances a sudden death will cripple those you leave behind financially are slim. If you’ve planned appropriately, life insurance is a luxury – you might choose a minimal policy to cover the costs associated with the funeral and settling the estate but, even if you do, it’s best to consult with an attorney to be sure you need it.

That’s not to say there aren’t times when purchasing a plan during retirement is a good idea. Obviously, if you still have a minor child in the house, it’s important to set up contingencies to ensure basic needs will be met and college paid for. If you’ve remarried, it may be worth having a policy to cover the new spouse that your ex can’t touch.

More than anything, though, it’s crucial to have something in place if you got a late jump on saving for your golden years. If you have any doubts whether your spouse will be secure based on the retirement planning you’ve done, then go ahead and find the least expensive option which will ensure they are taken care of. Further, if you have business interests or real estate – illiquid assets – it is important to be certain any outstanding debts will be covered.

Other than situations like these in which a life insurance policy is required, what if you would just like to have it? Perhaps you’d like to provide for your family beyond any inheritance they might have or avoid estate taxes. Maybe you have a charitable cause you’d like to leave a sizable to nation to. Either way, a life insurance policy is a great way to contribute to the future of others as part of your legacy.

Buying a policy later in life is a complex decision, so be sure to consult with a trusted professional regarding the type of plan that best suits your needs and goals. Whatever your reasons, whether you have coverage is ultimately up to you. Just don’t buy a policy as you head into retirement because an insurance salesman says you should.