Many retirees have reached the point of financial security and may not consider life insurance as important. Others may feel they do not qualify or cannot afford the rewards. There is also a misconception that life insurance is only suitable for people with young families, dependents or those with significant debt.
While some people are certainly more likely to see the need for life insurance than others, there are still many benefits of life insurance for retirees.
What are the benefits of life insurance for retirees?
Every financial situation is different, however life insurance has several valuable features that can benefit retirees. It’s important to remember that life insurance isn’t for everyone shethe insured, it is for your beneficiaries. Those who administer your estate after you die may have to pay for funeral expenses, debts, and taxes. Your partner or children may not have enough income to cover these costs, especially if they depend on you financially.
cover closing costs
Funerals or celebrations of life can be expensive. Costs vary based on services performed, but the average cost of a funeral in the United States over the past year was almost $8,000.
It’s difficult enough going through a funeral and burial of a family member or close friend without worrying about how you’re going to pay for it all. Life insurance to cover these costs can relieve your loved ones financially and give them space to grieve.
Pay off outstanding debts
About 20% of pensioners still carry a mortgage, and about 67% carry Credit Card Debt in Retirement. Some may sell their home, downsize, and use the remaining funds to supplement their other sources of income; others may obtain a reverse mortgage or home equity line of credit for their home.
Viewing life insurance as a financial tool is a great way to relieve your stress and feel better prepared for retirement and your future. If you die, you still have to pay your debts. However, proceeds from life insurance could help loved ones pay off any outstanding debt or bills you may have had.
Offer financial support
If you have a partner, they may not receive the same pension income as before your death. Some annuities provide a reduced percentage for a surviving partner, others only provide annuity funds for a limited period of time. If you die, your partner’s income may be reduced. You may also have dependent children or other people in your life who need financial support. Life insurance can provide a source of income replacement for those who depend on you and help them maintain their lifestyle.
Support a charitable cause
If giving back and contributing to something bigger than yourself is important to you, life insurance can be a great way to do it. Many people are passionate about a cause or charity. Did you know that life insurance proceeds a generous donation to an organization Your choice? You can also use the death benefit to create a lasting legacy, e.g. B. a scholarship.
Grant a tax-free benefit
Life insurance proceeds are generally tax-free. Other parts of your estate may be taxable, reducing the amount of money available to your beneficiaries. Life insurance can help cover the taxes owed so your beneficiaries receive all of their inheritance.
Decide if you need life insurance
When considering life insurance, there are two main things you need to check: how much you need and what it will cost. using a Life Insurance Calculator can help you determine the level of life insurance coverage that is right for your family. After completing the calculator, you should compare life insurance policies to ensure you are getting the policy that best suits your needs. A qualified insurance professional can help you get started.
Peace of mind is among the many benefits that life insurance can offer retirees. Insurance proceeds can provide your beneficiaries with ongoing income, pay for funeral expenses, pay off debts and help you leave a legacy. Life insurance can be a great way to make sure your loved ones are taken care of after you die.