Reaching retirement age usually means a reduction of expenses such as paying off the house, buying fewer vehicles, and no longer having to take care of the children. In addition, those who are retiring may not feel the need to carry a life insurance policy.
Did You Try Out Our Life Insurance Quote Comparison Tool? Save BIG!
Table of Content
Why Many Retirees Give Up Life Insurance Policies?
Retiring usually means giving up the status of the breadwinner. This is because, with fewer responsibilities, the idea of having to protect the family financially is seemingly no longer a priority. This is because the income consists of money that has been saved over time combined with retirement and Social Security means that many retirees see life insurance as unnecessary.
However, there are convincing reasons why even a modest life insurance policy can protect the spouse and the family as a whole in case they should pass away unexpectedly.
Why Retirees Should Consider Life Insurance?
The financial burdens that come to a family when a loved one unexpectedly passes away are often far greater than expected.
Funeral: Today, funeral expenses average over $9,000 which can catch many families off guard. There are additional costs that can drive up the cost of funerals which will make a significant dent in the retirement savings.
Debt: Many still has auto loans, credit cards, and other debts to pay off. With one income removed, it can become quite difficult to pay off the outstanding debt. This can lead to a downward spiral where a widow finds themselves deep in debt with no way out.
Legacy: Plus, retirees may want to leave a legacy for their children or grandchildren to go to college, help purchase a home, or use for other expenses. A legacy may make the difference between a grandchild going to the college of their choice.
The good news is that retirees can choose from a number of different policies and benefit levels that best suit their needs.
Choosing the Right Type of Policy
For those elderly over 65, the choice is between permanent or term policies. The permanent policies offer some additional advantages. But they are also expensive, and the return rate is not very useful for those who have already past 65 years of age.
So, a term policy provides plenty of coverage for a pre-set period at a much lower rate. Term policies can be renewed after five, ten, or more years. You can even sell or cash out under certain circumstances.
Setting the Benefit Level
The higher the amount of the benefits, the more you will have to pay regarding the monthly premiums. This means choosing a level that covers funeral expenses, outstanding debt, and providing a financial cushion or legacy. This will help to ease the financial burden on the widow and the family as a whole. You should take into account current savings, debt levels, and plan for the funeral.
For retirees who are looking for a little peace of mind when it comes to covering family expenses in the case, they pass away unexpectedly a good term life insurance policy is the answer.