When it comes to paying off their loans, seniors often find themselves in a real bind with growing mortgage, auto loan, credit card, and other debt that pile up while they are reaching retirement age. Worse, if one spouse should unexpectedly pass away, the other will lose a valuable source of income to help pay off the debt. You can only find affordable life insurance for over 60 if you compare your rate here.
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Life Insurance to Cover the Death of a Spouse:
One way that spouses can rest assured that their debts will be paid in case their partner passes away is having a life insurance policy. A life insurance policy can provide benefits that more than cover the amount that is owed to all types of debt.
The most obvious debt is the mortgage which applies to the home where you live. By having a life insurance policy pay it off, you have removed a major source of debt that will free up your other income sources. The same is true for an auto or personal loan that can be paid off in its totality. This will bring peace of mind to seniors over 60 who otherwise will worry about their financial futures.
Why Pay Off Loans Before Death?
It’s actually a pretty good question as much of the debt that is accumulated by one person will not fall to their surviving spouse such as credit cards for example unless both names are on the card. However, there are certain types of debt that do carry over and the spouse must pay in order to avoid getting hit on their credit rating or worse, go into bankruptcy. Even matured children who are independent can find a decent life insurance for their parents who are over 60 years.
By paying off your debt before the life insurance can be used, you can free up your income to cover other matters and have the life insurance benefits pay off the burial expenses and even provide a legacy for your family that they can use for college or even to pay off their mortgage.
How Much Life Insurance Should You Get?
This will mean doing some financial calculation in order to know the amount of debt you currently owe and what to get in terms of a life insurance policy. The benefit levels should be set so that all of the remaining debt is covered from mortgage payments, auto loans, and the funeral expenses as well.
Here, term life insurance is generally the best as it does have a time-limit from 10 to 30 years. If both of you should survive towards the end of the policy, then the new policy should take into account your current debt status and be adjusted either up or down in terms of benefits.
You may find that in certain cases selling off your life insurance policy may pay off the debt that you owe. However, you’ll need to have other coverage for funeral expenses and the like in order to use this particular method. This is why having a life insurance policy is so important whether you have a considerable amount of debt or not in that it provides your family with financial protection during their time of grief.