It is easy to think that life insurance is of no use to you as you get older. Perhaps you are retired, own your home outright, and have children who are now self-sufficient. While many people get insurance as a way to protect themselves and their loved ones if they die prematurely, there are many other financial situations to consider. You also may want to reconsider the amount of life insurance you need and the cost of your policy, regardless of your age. Before you stop making payments, or you allow your policy to lapse, you should consider a few reasons why you might still need life insurance as a senior citizen.
1) If you have dependents
Whether it is a sibling, a younger spouse, a disabled or non-adult child, or even a parent, you may need to provide ongoing support for someone you love. The most common reason that an income-earner would need life insurance is that he or she has dependents who rely on him or her financially.
2) If you’re in debt or still have a job
You may want to consider life insurance if you are still making payments on credit card debt, student loans, or real estate deals. One highly recommended option is a term life policy, which expires when your payments end. This is a smart idea because it gives you coverage until you are debt-free. It also makes sense, if you are continuing to work, to supplement your savings, even if you’re only working a part-time job. You may require life insurance if your part-time job earnings are helping to meet monthly costs for anyone else. This depends on the amount you earn and the amount you need to save in order to make up income needs.
3) If you own an illiquid estate that is subject to taxes
Insurance will also be necessary if you have a family business, depreciated stock or valuables that you don’t want your family members to sell or pay taxes for inheriting. In this case, a permanent or cash-value life insurance policy is the way to go. These types of policies can provide your heirs with an immediate source of cash.
4) If you’re leaving behind a charitable legacy
Many people consider leaving a generous sum of money for their favorite organization or their alma mater. If you are planning on doing this, you can utilize a life insurance policy to help benefit you as well as the recipient. If you don’t want to make annual donations, you can leave a financial legacy with the help of a life insurance policy.
5) If you want another investment
If you have a lot of savings and tend to be risk-averse, cash-value life insurance can be an investment. Life insurance could be a great way to diversify your investment. The tax-free growth and advantages that come with life insurance are bound to be very helpful.
Life insurance doesn’t have to end for senior citizens. If you’re in one of these situations, it would be a smart idea to look into life insurance options that may be right for you.