Why You Need Life Insurance After Retirement

Many people think that once they reach retirement, they will no longer have a need for life insurance. They may have a financial plan in place that will lead them to paying off their mortgage, putting their children through college, and having a substantial nest egg using their 401k, IRA, or other retirement investment accounts.

However, even if you already have a retirement plan in place, there are still important benefits and reasons to have a life insurance policy in place after you retire.

This article will discuss 4 of the benefits of life insurance during retirement, including a tax-free inheritance, tax-free retirement income, paying for long-term care expenses, and charitable giving.

4 Benefits of Life Insurance After Retirement

1. Life Insurance Provides a Tax-Free Inheritance for Your Loved Ones

Life insurance helps you leave your family, especially your spouse, in good financial shape should you die before anticipated. With life expectancies continuing to increase, your spouse could still live 20-30 years in retirement after your death and a life insurance policy can provide peace of mind they will be taken care of that whole time.

Additionally, instead of planning on leaving your current assets as an inheritance, life insurance allows you to “buy” an inheritance for your loved ones for pennies on the dollar. This way you can spend all of your money during retirement knowing that your loved ones will inherit a predetermined benefit amount tax-free through life insurance.

2. Life Insurance Can Be Used to Supplement Your Retirement Income

Responsibilities, bills, tax changes, and unexpected expenses do not retire when you do. While you may have tax-deferred savings accounts in place, how much of your retirement income will be tax-free? Cash value life insurance gives you a source of tax-free supplemental retirement income that can help make sure you have enough money to keep you financially secure regardless of what life brings in your retirement years.

3. Life Insurance Protects Against Long-Term Care Expenses

Long-term care could end up being the largest expense during your retirement. Not only that, but as life expectancy and inflation increases your retirement savings could be depleted very quickly in the event you need long-term care. Life insurance with a long-term care or chronic illness rider can protect your retirement income and your loved one’s inheritance from the significant likelihood and expense of long-term care services.

4. Life Insurance Helps Benefit Your Preferred Charity

Suppose you do not have heirs to leave an inheritance to, or need additional retirement income, or long-term care; your life insurance policy can still be used for an important and noble purpose. You can name your favorite charity as your beneficiary and support a favorite cause with a significant tax-free donation in your name at your death. This allows you to leave a social legacy by helping people or causes in need beyond your lifetime.

Learn More About Life Insurance After Retirement

Whether you are years away from retirement or fast approaching that day, life insurance can play an important and even essential role in your retirement planning. If you want to learn more about the benefits of keeping life insurance after retirement as part of your comprehensive financial plan consult our experts on how life insurance can be used to reach your financial goals during retirement.