The majority of the people think that they only require term life insurance when they are just starting out marriage life. This is because they want to protect their spouses and kids in case they pass away. Moreover, they may be having huge mortgages to pay and have plans concerning their children’s education. Unfortunately, things may not work as expected and during the retirement years, you may find you still need life insurance policy.
During the adult life, you may have had life insurance policy. In most cases, it was provided by your employer as part of the benefits package. Thus, you may have never thought of it. You just knew it is there but do not know a lot about it. Now that you are at your retirement age, your employer is not providing anymore and you ought to decide whether you need a new policy or not. Now, what is the best choice?
How life insurance can fit in
Before retirement, a lot of families utilize their household incomes to support their lifestyles. For instance, if both partners are working, then their incomes are quite essential in maintaining family’s standard of living. Even if one person is working, the same does hold true. If a partner passes away, then the family is likely to find itself in the financial crisis at worst possible times.
The main aim of life insurance is to offer protection to family members in case of loss of income as a result of passing away of the primary wage earner. Just like any other form of the insurance package, there are different types of life assurance. The following are some of the reasons you need.
Pay off debts
The perfect retirement is when you have settled your debts. Unfortunately, in this tough economic times, debt is quite abundant. In fact, a lot of people are now retiring with huge debt than in the past. Debt comes in a broad range of forms such as credit cards, mortgages, and loans. If you do not have adequate assets to settle your debts, then life insurance is necessary.
Cover taxes at death
When a person dies, he or she may have substantial tax bills to the estate resulting from real estate, capital gains, and other income sources. In this case, you need life insurance to pay your tax liability. Life insurance means that your beneficiaries will get more since tax bills are paid from policy proceeds.
Cover legal fees and expenses
Each estate does have expenses. However, where is the money to settle such expenses. It is necessary to ensure you have adequate cash to pay such expenses and fees.