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.
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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 financially protecting the family is seemingly no longer a priority. This is because the income consists of money 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 if they pass away unexpectedly.
Why Should Retirees Consider Life Insurance?
When a loved one unexpectedly passes away, the financial burdens that come to a family are often far greater than expected.
Funeral: Today, funeral expenses average over $9,000, catching many families off guard. Additional costs can drive up the cost of funerals, which will make a significant dent in retirement savings.
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Debt: Many still have auto loans, credit cards, and other debts to pay off. With one income removed, paying off the outstanding debt can become difficult. 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 it for other expenses. A legacy may make the difference between a grandchild attending the college of their choice.
The good news is that retirees can choose from several 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 passed 65.
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.
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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, and outstanding debt and provides a financial cushion or legacy. This will help to ease the financial burden on the widow and the family as a whole. You should consider current savings and debt levels and plan for the funeral.
For retirees looking for 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.