Retirement Life Insurance
Retirement life insurance policies are similar to those of most permanent or term policies. If you die, the death benefit is supposed to replace your income and help your family pay for your last expenses. You may want to consider getting a policy for yourself as you could lose your employer’s life insurance coverage when you retire. If you have debt, such as a mortgage, or a spouse who relies on you financially, it is a good idea to have a personal life insurance policy in place.
There are a few factors to consider when shopping for life insurance, regardless of when you plan to retire or have already retired. These factors include:
- The price of the insurance
- Duration of the policy
- The policy’s cash value feature
Budgeting for Life Insurance
Your objective is probably to choose a life insurance plan that fits within your retirement budget. But the rates for a new policy will probably be substantially higher than they were when you were younger. Term life insurance is often less costly than permanent life insurance. This is because permanent life insurance has a cash value and is lifelong, as long as you pay the premiums.
The cost of term insurance may increase as you age. To counter this, you can think about getting insurance with a shorter term to save on expenses. Fixed rates and death benefits are available with certain whole life and term insurance plans. That may help you avoid unanticipated hikes if you have a fixed retirement income.
Duration of Life Insurance
Even if you are a financially secure retiree, your assets may need to last for decades. Health and lifestyle expenses can quickly drain your cash and assets. We’re sure you don’t want to burden your family with financial stress after you pass away. To determine the duration of your policy, consider your lifestyle and other personal factors.
If you still have 15 years remaining on your home loan and it would be difficult for your partner to finance it, consider term insurance that expires when your home is paid off. If your adult children or grandkids will rely on you permanently, buy longer coverage.
Emergency Funds
It’s hard to predict your retirement financial demands. Most permanent life insurance contracts have cash value, which you may obtain while you’re still alive. You may borrow from your policy’s cash value. If your health insurance doesn’t cover a medical emergency, you may draw from your cash value.
A life insurance agent can help you pick the best policy for you and your family.
