Many retirees have reached a point of financial stability and may not take life insurance seriously. Others may feel ineligible or unable to afford the premiums. Also, there is a misconception that life insurance is only available to young families, dependents, and those with large debts. However, there are different types of life insurance that can work for everyone, there are also certain people who are more likely than others to understand the need for life insurance.
What are the benefits of having life insurance for retirees? While everyone’s financial situation is different, life insurance has several valuable features that retirees can benefit from. It is important to remember that life insurance is not for you, the insured person, but for the beneficiary. After you die, those who manage your estate may have to pay funeral expenses, debts, and taxes. You may not have enough income to cover the costs.
Covering Closing Costs
Funerals and life celebrations can be expensive. The average cost of a funeral in the United States last year was nearly $10,000, although costs vary depending on the services provided.
It is difficult enough to go through the funeral and burial of a family member or close friend without worrying about how you will pay for all the expenses, which can give you room to grieve.
Repaying Outstanding Debts
About 20% of retirees still have a mortgage, and about 67% will have credit card debt by the time they retire. Some people sell their homes to reduce their size and use the remaining funds to supplement other sources of income. Others may obtain a home reverse mortgage or home equity line of credit. Viewing life insurance as a financial tool is a great way to reduce stress and prepare for retirement and the future. Even if I die, I have to repay the debt. Income from life insurance, however, can help loved ones pay off outstanding debts and bills.
Providing Financial Support
If you have a partner, you cannot receive the same pension as before your death. Some annuities offer a reduced percentage to the surviving partner, while others offer a pension fund for a limited period only. Your partner’s income may decrease if you die. You may also have dependent children or other people in your life who need financial support. Life insurance provides an alternative income source for those who depend on you and helps them maintain their lifestyle.
Supporting Charity
If giving back or contributing to something bigger than yourself is important to you, life insurance is a great way to do that. Many people are passionate about causes and philanthropy. Did you know that life insurance earnings can be a generous donation to an organization of your choice? You can also use your death benefit to create a lasting legacy with providing scholarships.
Granting Tax-Exempt Benefits
Life insurance premiums are generally tax exempt. Other parts of your estate may be subject to tax, reducing the amount available to beneficiaries. Life insurance can help cover unpaid taxes so that your beneficiaries receive a full inheritance. Decide if you need life insurance
There are two things to keep in mind when purchasing life insurance.
How much do you need and how much does it cost?
Connect With Us at J Morman Insurance Agency so Janie can guide you over the whole process, you can contact her at (512) 246-6500