Many seniors have grown up with the idea of automatically purchasing life insurance. The main reason for having it was in case of the loss of a family member who was also the family breadwinner. Without any income the family would be left destitute. In more modern times there are usually two members of a family, both working and bringing in an income. Once they have retired and as they age, is life insurance still necessary?
The Pros and Cons of Life Insurance for Seniors
- For some, term life insurance is worth the investment. Since it ensures a life for only the time specified, it has no investment built into it. This makes it cheaper to purchase. However, most people outlive the period where they are financially responsible for children.
- If you have retirement income to invest, insurance is not your best investment. Premiums are usually high and the return is low in comparison. A better option would be to invest in insurance to cover your funeral and burial costs.
- Seniors who have accumulated enough wealth may be looking for ways to lower their estate taxes. In this case they can leave their heirs more of their wealth. Life insurance death benefits are quite often exempt from inheritance tax (in those areas that have an inheritance tax) so some seniors choose single premium life insurance. This is paid in a lump sum and covers the insured person until their death.
- Can you afford it? Many seniors are not in a position to pay for life insurance. In this scenario there are better options for having enough money to last throughout your retirement.
If you already work with an insurance advisor or agent, they are the ones to discuss life insurance with. They’ll take into consideration what is best for you in your situation. Life insurance choices vary from person to person and couple to couple. Only purchase what you can afford and what will perform the best for you and your family.