We’ve all heard the self-proclaimed experts who say that you should only buy term and that once you reach retirement age, you won’t need your life insurance any longer.
Here are the Top 10 reasons why it is important for senior clients to keep some permanent life insurance in force even after retirement:
- Having life insurance allows retirees to be more aggressive in spending their retirement funds on their own needs because they know that those assets will be replaced for their heirs with income tax-free dollars.
- If they have to use liquid assets to pay for long-term care of any kind, the life insurance can replace those assets when they die.
- A portion of the death benefit can be accessed if the insured develops a terminal illness and can be used for additional care or other needs.
- The cash value in the life insurance policy can provide a ready source of cash if an emergency arises.
- Recent studies show that almost 70 percent of individuals expect to be working either full- or part-time in retirement. Life insurance can provide money to replace the income stream when they die.
- Life insurance can help satisfy some individuals’ need to control assets. They don’t have to gift away assets to avoid estate taxes because the policy will be there to help pay the taxes.
- Not all retirees are debt-free. Life insurance can help pay off any debts at death.
- Life insurance can be useful in dividing assets when there are children from a second marriage.
- The life insurance death benefit provided an extra source of cash while the survivor adjusts to new circumstances and can alleviate having to make immediate financial decisions to generate cash.
- Life insurance can help pay for final expenses, long-term care expenses (through a Long Term Care rider) and medical costs that may not be covered by Medicare.
As you can see, having life insurance in retirement can provide much-needed peace of mind. As the saying goes, “Life insurance is not for those who die, it’s for those who live.” There are plenty of reasons to have life insurance as you get older.