Are you in the final years of your career? Or did you recently retire? If so, you may be in the process of evaluating your financial strategy and making adjustments. You may be analyzing your investment strategy or developing a retirement budget. Perhaps you’re deciding when to file for Social Security benefits. This is likely a busy but exciting time.
This also may be a great time to review your life insurance. You may have acquired a variety of life insurance policies over the years. Many people purchase life insurance to protect their spouse, kids and other loved ones in the event of their death.
Many retirees feel that they don’t need life insurance coverage. Some even cancel their policies. However, there may be good reason to keep your life insurance or even increase your coverage. Below are two common reasons why retirees ditch their life insurance and why these reasons may not be correct. If these ideas sound familiar, you may want to reconsider.
Myth No. 1: I don’t need life insurance if my kids are grown and financially independent.
The most common motivation to buy life insurance is to protect young children. If that was the reason you bought insurance, you may feel like you no longer need that coverage once your children are grown. If you’re an empty nester with significant assets and little debt, life insurance may seem unnecessary.
Don’t cancel those policies just yet, though. Life insurance can serve a variety of purposes, and it can be a helpful resource in retirement. That’s especially true if your policy has accumulated cash value. You can use that cash value as an emergency reserve or supplemental income source. You may even be able to take tax-efficient loans or withdrawals from the policy in retirement.
You can also redirect the purpose of the death benefit. Just because it was originally intended to protect your young children doesn’t mean it has to stay that way. Consider using the policy to fund college for your grandchildren or to leave a charitable legacy.
Myth No. 2: My spouse will have plenty of assets after I pass away.
Many retirees enter retirement with more assets than they’ve ever had in their life. After all, you’ve probably been saving for retirement for decades. Surely those assets will be sufficient for both you and your spouse. If you have plenty of retirement assets, you might think there’s no need for life insurance.
Remember, though, that retirement can span several decades. It’s possible that your assets may not last as long as you expect. You may spend more than you’d planned, or the financial markets could take a downturn. You may face significant medical and long-term care costs in the final years of your life, and those costs could deplete your assets.
Life insurance gives your spouse a boost in assets upon your death. He or she can use that money to fund living expenses, provide gifts to family or pay for his or her own long-term care. If you pass away relatively early in retirement, your spouse may need to support himself or herself for many more years. Life insurance could help your spouse overcome that challenge.
Ready to review your life insurance as you head into retirement? Contact us at Senior Care Alliance for more information. We can help you analyze your policies and your needs and develop a strategy. Let’s connect soon and start the conversation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 17965 – 2018/9/4
All written content on this site is for information purposes only. Opinions expressed herein are solely those of Advisors Asset Management, Inc. and our editorial staff. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your individual adviser prior to implementation. Advisory services are offered by Advisors Asset Management, Inc. Insurance products and services are offered through Senior Retirement Advisors. Advisors Asset Management, Inc. and Senior Retirement Advisors are affiliated companies.
Advisors Asset Management, Inc. is a registered investment adviser in the State of Washington. The adviser may not transact business in states where it is not appropriately registered, excluded or exempted from registration. Individualized responses to persons that involve either the effecting of transaction in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption. The presence of this web site shall in no way be construed or interpreted as a solicitation to sell or offer to sell investment advisory services to any residents of any State other than the State of Washington or where otherwise legally permitted. Content should not be viewed as an offer to buy or sell any of the securities mentioned or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Advisors Asset Management, Inc. is not engaged in the practice of law.
Advisors Asset Management, Inc., Senior Retirement Advisors and Janet Pack are not affiliated with or endorsed by the Social Security Administration or any government agency.