Life Insurance After Retirement

A lot of people think that with retirement and the presumed settled financial situation the need for life insurance reduces or disappears completely. This is not necessarily so but with retirement, the need changes and it may not be the priority it once was. And yet many continue with their policies, but often for the wrong reasons. One of the most common is force of habit - "I've always had life insurance so how can I stop?" This is the wrong reason. When you sell a car after many years you don't feel bad about the end of the insurance for the car. You are happy that you had the coverage while you needed it. While your life is far more valuable than a car or a house, the same logic applies. You must know when you need life insurance and when it is not required. Answering the following questions should help to give you a clearer idea of your post-retirement insurance needs.

Is Life Insurance Necessary?

The answer to this question lies in another one. Will anyone sufferer financial loss when you die? If the answer is no, then you probably don't need it. For example, take the case of a couple with a steady income, sufficient for their needs, from the investments they have made over the years. This income will continue even after one of them dies, so what will be gained from a life insurance policy? On the other hand, if one person is involved in activities that bring in additional income on top of the investment returns, then the loss of this may need to be compensated by insurance.

But Do You Want Life Insurance?

Okay, you may not need life coverage, but the idea of leaving something for your family or a favorite charity when you die can be attractive. For a small monthly outgo, the amount you leave can change the lives of a lot of people or give a worthwhile cause a huge boost.

If You Do Need Insurance, How Much Do You Need?

If you do need life insurance after retirement, you should now the amount you require. Calculate the financial loss that others will feel upon your death. What amount of money will they need to provide them a regular income that will enable them to continue to live as they did while you were alive? This is the amount of life insurance you should have.

How Long Will You Need It?

The answer to this question depends on when you take the policy. The earlier you take it -.i.e. the younger you are - and the longer the duration of the policy, the lower will be the monthly payment. So it makes sense to take a life insurance policy as soon as you can. This will cover your family from a loss in income if you should die. If your planned retirement is 25 years in the future, then the policy should be for at least that length of time. Adding on a few more years will provide you a cushion if things don't work out exactly as planned. And the additional cost will be minimal.

Plan For Retirement Now

The sooner you plan and act, keeping your retirement issues in mind, the better it is or you. There will be major changes in your lifestyle after you retire and it can, for many, be a difficult adjustment. Having the finances in place to cover your family if the unexpected should happen will allow you to plan and look forward to your retirement without a feeling of financial insecurity.