Purchasing a life insurance policy is one of the most important financial decisions one can make while in the middle of their professional career. Life insurance at this time is seen as so critical because people typically have a young family to look after or larger debts to take care of. But what about the need for life insurance after retirement?
After your years of hard work at your career, it can seem reasonable to stop paying for life insurance coverage. To many, life insurance is a financial tool that is only needed during your working years, but this just isn’t true. There are a number of sound reasons why people who are retired can benefit from hanging on to their policy for a while longer.
Covering Your Outstanding Debts
Unfortunately, today many Canadians are retiring with some form of debt that will need to be covered. From credit cards to car payments to even mortgages, the debts that retired Canadians carry can come in many forms. Having your life insurance plan in place into retirement can be extremely helpful for paying off any debts that would otherwise fall to your family members to cover.
Without an insurance policy, your family could be forced to liquidate any assets you may have owned in order to ensure that the debts are paid off. If you are carrying any debt into your retirement years, it is worth have a life insurance plan on your side to protect those who matter most in the event of your death.
Funeral costs and other final expenses are fees that everyone will have to consider during retirement. Your plan’s benefit can be an essential source of funds that can help prevent using your savings to cover any final fees. People argue that you can simply use your savings to cover these costs, but will your savings be able to do the job?
Your savings aren’t always designated as your final expense funds; they can be and often are used for a number of different ventures like vacations and new retirement hobbies. During this time in life, it makes sense to have a life insurance plan that is solely used to cover funeral costs and legal fees. In the end, bogging down your savings by including inevitable costs can negatively impact your overall enjoyment of retirement.
Your Family in Need
Life insurance policies are purchased to ensure that those we care most about will be financially taken care of should something happen. When you are retired, you need to ask yourself if any members of your family will face financial hardships when you pass away. You may have children that will still be living with you or they may have moved out, but have had children of their own. In either situation, you will have loved ones that may require some financial assistance.
Finally, you might want to ensure that your spouse will be able to maintain their quality of life if you were to die unexpectedly. Try to put yourself in his or her shoes and think of yourself as the surviving partner. If you feel as though you will need extra income, consider keeping your life insurance policy in force into your retirement years.
Leaving Behind a Legacy
A life insurance benefit doesn’t solely have to be used to provide essential financial support. Your family may not need the money your plan will provide, but you may still want them to have it. Leaving a legacy behind to your family can simply mean using your benefit to cover loved one’s future milestones. For example, a life insurance benefit can cover your grandchildren’s college education, pay for their weddings, or even take care of the down payment on their first home.
Another option available to you is to leave your benefit to the charity of your choosing. By donating your plan’s benefit to a charity, you will be making much more of a contribution than you could through a phone solicitation or fundraiser.
Equalizing Your Estate
Certain gifts you leave behind after you pass away aren’t easy to split among members of your family. Since assets like summer homes or family businesses are difficult to equally divide, your loved ones could be forced to sell them off instead of keeping them.
With your life policy’s benefit, you can effectively leave the property or the family business to one of your children or grandchildren and leave the cash from the policy to the other. Upon your death, the children interested in a family property will be able to obtain it, while the other child will receive an equivalent cash inheritance.
A Decision That’s Up to You
Keeping your life insurance into retirement is entirely up to you, but you should take careful consideration before you decide on canceling your policy. If you still have dependents, debts, or simply want to leave something behind for your family as you retire, having life insurance will definitely be a great asset to you.