Upon reaching retirement, you may wonder if maintaining a life insurance policy is a wasted expense. This is particularly common if your hard work and planning have enabled you to live comfortably in retirement, or all of your debts are paid off.
Unfortunately, many retirees are not living in the best case scenario, and their deaths can have a large financial impact on a living spouse or other family members. Determining if continuing to pay for your insurance policy is the right choice for you can come down to several factors, as well as simply personal preference.
Retirees Who Provide Support
Despite reaching retirement age, there are those that still maintain a part-time or even full-time job after retirement. This may be due to a desire to keep yourself busy or an actual need to supplement your retirement benefits. Keeping an active life insurance policy in this case is a smart decision, especially if you have a living spouse or family you provide financial support to. Your life insurance benefits may protect against a sudden and potentially devastating drop in household income in the event of you passing on. Consider carefully if life insurance may be needed to cover income or benefits lost.
Debts And Taxes
Debt is very often the number one reason to continue paying into your insurance policy despite retiring. Mortgages that are not entirely paid off or other debt can drain what would have rightfully been given to your family. In cases where you leave a sizeable estate to your spouse or heirs, inheritance and estate taxes can pack quite the punch. There is no getting around them and the IRS may stop at nothing when it comes to squeezing the money out of your beneficiaries. Your insurance benefits can easily be used to help pay for the taxes, fees, and other costly expenses that are due after you pass.
Accelerated Death Benefits
Accelerated death benefits are yet another benefit to having a life insurance policy even after you have retired and all your debts are paid. Even with careful planning, events that could not possibly have been predicted can occur and change everything. ADBs provide an ability to receive benefits in advance when terminal or critical illness strikes and in cases requiring long term or hospice care. Without taking advantage of this available benefit, your debt-free status can swiftly evaporate via mounting medical bills which can eat into your estate. You may never end up needing accelerated death benefits, but it is better to be prepared than to be caught unawares and cause financial strain to your loved ones.
A financial advisor can help you with more than just your investment accounts, asset protection and estate planning. Inquire about the ideal life insurance policy that works well with your financial plan, and get the answers you need. Whether you plan to leave your estate to a favorite charity, or to your heirs, we can help. Contact the BD Financial Concepts team today.
Insurance products and services are offered through BD Financial Concepts and are not offered by Global Financial Private Capital, LLC. Guarantees are associated with insurance products and are backed by the financial strength and claims-paying ability of the issuing insurance company and may be subject to restrictions, limitations or early withdrawal fees, which vary by the issuer. They do not refer, in any way to securities or investment advisory products.
This article may contain concepts that have tax, accounting and legal implications. This material is for informational purposes only. It is not intended to provide tax, accounting or legal advice or to serve as the basis for any financial decisions. Individuals are advised to consult with their own accountant and/or attorney regarding all tax, accounting and legal matters. Neither Global Financial Private Capital, LLC nor its Investment Advisor Representatives are so qualified and, as such, do not provide tax or legal advice. If you base a decision on information contained in this article, you will be solely responsible for that decision.
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