I’m All Set to Retire: Do I Really Need That Life Insurance Policy Anymore?

Each of us has a different vision of what retirement will look like. Some plan to travel, while others hope to volunteer in their community or spend more time with family. You’ve spent all these years focusing on building a nest egg for your later years, it’s time to sit back and reap the rewards. For many, this means doing away with their life insurance policies. After all, there’s little to no income to replace should you pass on and your dependents are out of the house, right?

In many instances, this is true. However, what you do with your life insurance policy should be carefully considered before making any rash decisions. Let’s look at a few questions you should ask yourself when considering your options.

Have You Considered Estate Planning?

When a family member dies, those left behind are often left with a great deal of expenses – funeral costs and federal and state estate/inheritance taxes leave some heirs scrambling to sell off assets.

For individuals whose goal is liquidity, a life insurance policy such as an irrevocable life insurance trust can prove beneficial. The policy cannot be modified, revoked, or terminated for as long as you’re alive. Upon your death, proceeds are protected against creditors and estate taxation.

If this is something you’re considering, be sure to seek the guidance of an experienced life insurance agent or financial advisor.

Are You Still in Debt or Working?

Many consumers reach retirement age and are still in debt. Whether it be from failed business ventures, credit cards, or mortgage, this outstanding debt will still need to be paid once you pass away. Retirees who are still facing outstanding debt should consider their life insurance options. A guaranteed level-premium term life policy is a great way to protect your family against a mountain of debt upon your death.

Again, be sure to speak with a licensed professional before making any changes to your current policy, or committing to a new one.

Do You Have a Disabled Child or Other Dependent?

A retiree whose children are out of the home and spouse is self-sufficient might not have a need to continue their life insurance. However, if you have a special needs family member, their care after your death should be a consideration. Additionally, will your spouse lose a significant amount of your pension or other monthly income? If so, a life policy can help fill that gap.

Do You Wish to Leave a Charitable Legacy?

While consumers often choose to make annual donations to a charitable organization, many are now realizing the benefits of leaving a charitable legacy in the form of life insurance. When structured properly, your gift can benefit both you and the recipient, at a lower out-of-pocket cost to you.

Do You Own Your Own Business?

Business owners have a responsibility to more than just their family. They have employees and business partners to consider and, for many, their death could have a significant impact on those left behind. If you’re unfamiliar with key man life insurance, visit our blog for more details regarding this critical business tool.

As you approach the finishing line for your retirement planning, it’s important that you have the full picture regarding where you stand financially. Ask yourself:

• What sources of income will I/we be reliant on?
• What are our outstanding debts, including a mortgage?
• Am I in good health? How is my spouse?
• Who is dependent upon me and how?

Many view life insurance after retirement counterproductive, until they’ve considered these questions. While it may not be a necessary investment, you owe it to your loved ones to take a moment to examine your situation from every angle. And do not ever cancel an existing insurance policy without speaking with an insurance representative first.