Why Have Life Insurance When you Retire?

  • September 3, 2015

In June 2015, Marvin Feldman, President and CEO of Life Happens, wrote an article entitled:  6 Reasons for Life Insurance When You Retire.  He had some really good points, and I want to give credit to him and paraphrase his thoughts.

First off, if you still owe somebody, or love someone, then yes, you need life insurance.  If you don’t love anyone, heck why have it…………….

But let’s look at some of the reasons to need life insurance after 65.

Chuck Dudley

Chuck Dudley

1.  YOU’RE STILL THE “BANK OF YOU”

According to Mr. Feldman, 63% of parents over 55 are still supporting their children and/or grandchildren.  What happens if you are no longer around to provide that support?  Who will your children turn to for financial help?  Friends or other family members?  No doubt, life insurance can provide the funds to maintain this support.

2.  YOU HAVE A SPECIAL NEEDS CHILD

If so, you may need to arrange for continued care after you are gone.  This can be done by funding a special needs trust with life insurance to provide the resources necessary to provide the level of care needed for this child.

3.  YOU’RE ‘RETIRED’ BUT STILL WORKING

What if you are still earning money that you rely on?  You’d need to replace the income and the only way to do that is with assets at work.  If you don’t have the assets, life insurance can create these assets at the time of your death.  How much you need depends on your lifestyle and your legacy you want to create.

4.  YOU HAVE A PENSION/RETIREMENT CASHFLOW THAT DIES WITH YOU

If you have a pension/annuity with no survivorship option, how do you replace that income stream for your spouse?  Once again, life insurance can replace the lost pension income by creating the assets that can be turned into an income stream.

5.  YOU HAVE INSTALLMENT DEBT

According to LIMRA, retirees age 65-74 who still have installment debt have education debt of an average of $2,300, while 65% of their debt is vehicle loans.  Many retirees still have mortgage debt.  Life insurance can make sure these debts are paid off at the debtor’s death.

6.  YOU’D LIKE TO LEAVE A LEGACY

Live insurance is a very efficient tool to use for estate planning and the equalization of assets being left to heirs and for charitable planning.  A small premium can create the money at death to accomplish these goals.

7.  BONUS IDEA!

Maybe one of the best ideas is the use of cash value as a buffer or hedge for your retirement income planning.  Nothing ever stays the same, and plans don’t always work out.  If your assets cannot provide enough income for retirement, or if they lose value, cash value life insurance can be a tool to help even out the tough times.

This one is worth taking about.

ACTION PLAN

If you really want to make sure you have right ideas for moving forward in a positive manner, we will listen.  We’ve been able to help families and businesses learn to use money wisely, and we’d like to help you too.   We would be honored to visit with you about how to help you and your business.  My number is 501-318-0010, or you can send me an email at cdudley@argentfinancial.com.

An hour of your time spent analyzing your situation might make a lifetime of difference

Arkansas Insurance Producer # 1005698

That’s all for this month! If you’ve enjoyed what you read, please share Money Matters with a friend, family member or loved one.

Sincerely,

Chuck Dudley