Why You Do Not Need Life Insurance after You Retire
Life insurance is not always mandatory. Obtaining a life insurance policy significantly depends on your financial condition. The purpose of life insurance is to provide for needs when there is loss of income due to these factors . Life insurance helps protect your spouse and children from poverty in the case of your untimely death. However, once your children become independent enough and you and your spouse accumulate sufficient assets, the requirement of paying the premiums for life insurance becomes much lesser. There are some questions you need to ask yourself when considering whether or not life insurance.
Firstly, you need to know if you will still be working post retirement age. A significant amount of Americans and people from all over the world continue to work even after they have passed the mark of retirement . Life insurance can protect your family from the loss of your income in the event of a premature death. If the retiree does not have any earned income, then the necessity for life insurance is minimal. If the retiree’s death may lead to significant loss of income, then there may still be a need for life insurance even in retirement.
Secondly, you will have to know if your spouse and your children are self-sufficient. Young families can provide a significant amount of security to the family. The needs of the family can change over time and there may be various expenses and debts to be bared. It is important to plan what would happen in the event of your death, whether your children are young or grown adults who are independent. If they are able to assist covering your bills or if you have sufficient assets in hand, the requirement for life insurance is bare minimum. Some family situations may demand the need to hold on to your life insurance policy. For example, you may have had a child quite late in your life or you have a relative or family member who has a disability or special needs and they depend on your income. It is wise to pay the premiums of your policy even in retirement should such a situation arise. If your spouse loses some or all of the benefits of your pension or Social Security income when you pass away, life insurance can fill the void and prove to be very helpful. In summary, all you need to do is evaluate who is financially dependent on you.
Lastly, check if there are estate taxes to be paid off. In most cases, individuals who own a life insurance plan will use the policy to cover their estate taxes in the event that they do not own enough liquid assets to cover the taxes. It is recommended for you to talk to an estate planning expert before taking on a life insurance policy for tax purposes. A fee-planner or a tax lawyer can be very helpful in these situations. So in general, depending on how financially covered you are and depending on who depends on you financially, life insurance after retirement can be situational. If all of these factors have already been covered, then there is no requirement for you to have life insurance during retirement.