When the average person reaches the age of retirement, he or she often thinks about what to do for the rest of his or her life. They may even think about continuing employment elsewhere or going on a long-awaited vacation with their family. What most people do not ponder about is buying life insurance after retirement.
Understandably, this issue didn’t seem to be of the utmost importance to a retiree but if you were to ask yourself: “Would my family suffer financial difficulty if I were to breathe my last tomorrow?” and admit to answering “YES”, then you definitely need a life insurance policy as a backup plan.
Nonetheless, retires should still be prudent in financial planning even after they are considered past their prime, and taking up a life insurance policy even when you’ve hit 55 years of age may be one of the wisest decisions you’ll ever make.
What’s in it for retirees?
It is not unusual to have people purchase term life insurance that covers policyholders up to age 100. This is because they staunchly believe in the benefits of life insurance even after retirement.
Other benefits you would enjoy when you choose to retain or sign up for a life insurance policy upon retiring include:
- Have enough funds to pay for your own funeral: While this sounds a little morbid to some, I think it’s perfectly sensible to think about how your funeral will be paid off in the event of your death. While all of us wish to leave the procedure to our next-to-kin, the sometimes-astronomical cost of funerals may even burden your loved ones. Having a sound life insurance policy ensures all funeral expenses are taken care of, which will leave you to depart for the afterlife happily and without unfinished business.
- Pay off old debts: More and more people are, regrettably, retiring with even more debt than they do in their prime. It would be such a shame to leave a legacy of bad debts behind. Instead, you can use your life insurance payout to settle these debts so that your dependents won’t be saddled with expenses or be forced to liquidate your assets.
- Settling after-death taxes: Again, like funeral expenses, after-death taxes can burden your loved ones with its significant amount. Tax implications exist whether you like it or not, and a good life insurance payout will ensure this is does not cause unnecessary worry to those who are still in the land of the living.
- Leave a memorable legacy: Who says you won’t be useful after death? Prove your worth, literally, by donating to a charitable cause of your choice.
If you already own a life insurance policy…
If you have been prudent enough during your youth to purchase a good life insurance policy, then congratulations are in order. Now, all you need to do is strategize well and make use of your existing policy as you approach your twilight years. Strategies include:
- Consider not renewing your term policies: You may have bought term policies earlier when you were thinking about your kids and spouse. However, now that they are all grown up, they are able to fend for themselves and will not need to depend on you as much. This is a great time to save money by letting your term policies expire and in the process, fall back on your pension benefits and Social Security for income purposes.
- Enjoy better cash flow by making your dividends pay premiums: This is especially useful if you possess a whole life policy, which frees up some cash and may lead to tax-deferred growth.
- Purchase a life annuity: Exchange your whole life policy for a life annuity which will bring you more active benefits.
Qualifying for affordable retirement life insurance
If you’ve decided you need life insurance to accompany you into your twilight years, you now need to think about passing the risk assessment associated with purchasing a life insurance policy. Besides taking good care of yourself (it’s never too late to stop smoking and start exercising), you can educate yourself on high risk life insurance companies as some provide good policies for retirees over age of 50.