Senior Life Insurance: Is it a good idea?

The Need for Senior Life Insurance

Many people will tell you that life insurance “isn’t needed after you retire” or that “life insurance is only needed when someone is relying on your income (i.e., you are the breadwinner for your family). At least that is the typical refrain from some of the finance “gurus” on television and radio. I happen to disagree. First, let me say that I certainly don’t think that everyone needs life insurance. But then again, I can think of a whole lot of people that want it–whether they need it or not. And whenever I encounter someone that tells me that they don’t want life insurance, I always ask them how much life insurance coverage they would want if it were free. That usually changes their mind! So, is there a need for senior life insurance? Yes, there are several reasons that a senior citizen might want and/or need life insurance.

Senior Life Insurance for Estate Planning

Estate planning is a big deal. If you have an estate that is likely to create estate tax issues, life insurance can be an effective way to minimize or even eliminate those taxes. It is beyond the scope of this article to discuss the details, but the effective use of permanent life insurance policies is one of the best ways to avoid a big estate tax burden and efficiently transfer assets to the next generation. (If you’d like to discuss this topic, please feel free to call or email–this is one of my specialties.)

Pension Maximization and Social Security Maximization

If you are (or will be) the recipient of a defined benefit pension, life insurance can be used to maximize the value of your pension benefit and buying life insurance can actually increase your spendable retirement income. Again, the details of making this strategy work go beyond the scope of this article, but “pension max” is a time-tested method of maximizing retirement income streams. Some of the same strategies can be applied to social security, again making life insurance a powerful tool for retirement income planning.

Final Expenses

Even if you aren’t going to have an estate that creates tax issues, senior life insurance can be used for everything from paying for final expenses (e.g., burial costs) to providing funds to supplement your survivor’s income and lifestyle. It can also provide your survivors with liquidity in a time of personal and emotional stress. Rather than having to liquidate investments or seek funds from others, a senior life insurance policy death benefit can provide spendable cash at a time when it is needed most.

If you are a senior looking for a senior life insurance policy, contact us by telephone at (877) 883-3561 or by email and let us help you find the right policy for your needs.

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About The Author

Richard Eddy

Founder of and Cona Financial Group Richard Eddy has been assisting clients with their life insurance needs since 2005. He is an expert helping people find the right policy to fit their specific situation. In addition to insurance planning, he is also experienced in a wide range of financial planning topics including investment and portfolio analysis, tax planning, retirement planning and estate preservation strategies. You can call Richard toll-free at (877) 883-3561.