When you are on the brink of retirement or already retired, you may wonder whether you need life insurance in this new phase of life. Even if you are financially secure there are various factors that you must consider before taking a decision. In this blog, we shall discuss those factors that will help you to make an informed decision about whether buying new life insurance or continuing with your old policy is a good option for you.
Importance of Life Insurance for Families
Life insurance acts as the security blanket for your family where the majority of your income is spent on maintaining your standard of living and you are left with minimal or no savings. It holds for both double-income families and also in families where you work while your spouse, by staying at home, helps to save money on childcare and other significant home services. If you were to die without a life insurance cover, your loved ones may be exposed to a severe financial setback with no immediate relief.
Do You Have Added Income Source?
While life insurance is among the most preferred choices if you want to ensure that your loved ones are well taken care of after your death, you may consider other options too. Other than your life insurance, your beneficiaries can also receive payouts or survivor benefits if you have an extra source of income such as an Individual Retirement Account (IRA) or your Social Security account.
Life Insurance for In-Debt Retirees
After retirement, if you still have unsettled mortgages or loans, having life insurance coverage may help you in paying off such debts without putting a strain on your financial health in your retired life when your income sources are limited.
While ideally, you want to enjoy a debt-free retired life, studies suggest a somewhat different scenario. Studies on mortgage payments on home loans show that only 68% of 70 years and above have cleared their debts and in the age group of 65 and above, there are nearly 46% of homeowners with uncleared mortgages.
Financial Status of Your Spouse and Children
If your family members are financially self-sufficient, you may not need life insurance but otherwise, an assured death benefit can be beneficial if your spouse or children depend on you for their needs. Also, if your death impacts other income sources such as a pension, the life insurance payouts can compensate for such gaps.
Life Insurance for Estate Tax Payment
If you own assets worth millions of dollars, life insurance can help pay your considerable estate taxes and other associated legal costs which otherwise may have to be paid by your family after your death.
How Can the Cash Value Help in Retaining Your Policy?
You can use the accumulated cash value of your life insurance to continue paying future premiums without having to discontinue your coverage. However, it may affect the final death benefit amount.
Secure Your Retired Life with J. Archer Insurance
If you need expert advice on whether you require life insurance once you retire or how your policy can be restructured to avoid paying high premiums, contact our team at J. Archer Insurance Group today.