As we ease into our retirement years, life insurance may be one of the things we think we can let go when we retire. Children are grown and have families of their own and seniors may opt to discontinue life insurance payments. There are some things to think about before you decide to let the life insurance payments stop.
What were once dependents in young children are not dependent any longer, but remember the one dependent you may still have; your spouse. If you were to pass on would your spouse need protection from the loss of your income? Social Security income very often decreases when you die, your pensions from the company you retired from may cease, any annuity’s you may be receiving may stop and applying for any remaining benefits may take what little savings you have to get to them. Even in retirement, a loss of income may have a big influence on your spouse’s life.
It is crucial to know what restrictions are attached to the income your spouse collects when you die. If you are the caretaker for your spouse, you want to make sure that they are taken care of without you, and your life insurance policy can make up the difference in loss of income when you pass on.
When planning your estate, remember, life insurance does not require taxes to be paid on it, and it can be used to pay any inheritance tax. When a life insurance trust is set up correctly, it can be an important tool for estate planning.
Not every retiree find life insurance a practical part of retirement, while others feel it can provide a sound planning strategy for their affairs, while offering income to a spouse. Look your life insurance policy over before letting it drop. It may well be the difference between living and existing for your spouse.