5 Benefits of Life Insurance for Retirees

A senior black couple together on the tennis court.

Many retired people have reached a point where they are financially secure and may not consider life insurance necessary. Some might not be eligible or able to afford the premiums. It is also common to believe that life insurance is only available for those with dependents, young families or with high-interest debts.

Although some people are more likely to need life insurance than others there are still many benefits to life insurance for retirees.

Every person’s financial situation may be different. life insurance offers many valuable features that could benefit retired persons. Life insurance is not for you the insured. It is for your beneficiaries. After your death, those who will manage your estate may be responsible for paying taxes, funeral expenses and debts. If your partner or children are financially dependent on you, they may not have enough income to cover these costs.

Final expenses

Funerals and celebrations of life can be costly. Prices will vary depending upon the service provided. However, the average funeral cost in the United States was nearly $8,000 last year.

It’s difficult enough to go through the funeral and burial of a close friend or family member. Life insurance can help alleviate the financial burden for your loved ones, and give them time to grieve.

Repay outstanding debt

20% of retirees still have a mortgage and 67% continue to carry credit cards debt into retirement. Others might sell their house and use the funds to supplement other income sources.

Life insurance can be viewed as a financial tool that will help reduce stress and make you more prepared for retirement. Any debts you may have after your death will need to be paid. A life insurance policy can help your loved ones pay any remaining debts.

Provide financial support

You may not receive the same pension income if you are a spouse. Some pensions offer a lower percentage of income for the surviving partner. Others only offer pension funds for a specific time. Your partner may see a decrease in their income if you die. There may be dependent children and other people in your life that need financial support. Life insurance can replace income for dependents and allow them to maintain their lifestyle.

Support a charity

Life insurance is a great way for you to give back and contribute to something bigger than yourself. Many people have a passion for a cause or charity. Did you know that your life insurance proceeds can be used to make a substantial donation to an organization of choice? The death benefit can be used to leave an ongoing legacy such as a scholarship.

Offer a tax-free benefit

Life insurance proceeds are generally exempt from tax. Your estate might have other assets that are subject to taxes. This could reduce the amount of money available to your beneficiaries. Life insurance policies can be used to cover taxes so that your beneficiaries get their entire inheritance.

Deciding whether you need life insurance

There are two things you should consider when looking into life insurance: how much and what it will cost. A life insurance calculator will help you decide the right amount of life insurance coverage for your family. After you’ve completed the calculator, it is time to compare life insurance policies so you can get the best fit for you. You can get help from an insurance professional.

A life insurance policy can provide retirees with peace of mind. The insurance proceeds can provide an ongoing income for your beneficiaries, pay off debts, and cover funeral expenses. A life insurance policy is a great way for your loved ones to be taken care of after you die.

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