When you have a young family, life insurance is an essential part of making sure that your spouse and children are financially secure in the event of your death. You likely have a mortgage to pay, you might have other debt, plus you want to provide for your children’s education.
But by the time you’ve retired, your financial picture and your responsibilities have likely changed. You might not have the same debt load, your mortgage may well be paid off, and your children are likely finished with college and out on their own. What does this mean for your life insurance needs?
For many retirees, reducing or eliminating life insurance makes sense. Your premiums are likely to be higher than they were when you were younger, and your family’s needs have changed. If your spouse will be able to live on savings after you’ve passed away, you might only need a small policy to cover your funeral expenses and final bills.
On the other hand, you might choose to continue to carry a significant life insurance policy, and use it as a tool for leaving a substantial inheritance for your children, grandchildren, or other loved ones.
Regardless of your goals, retirement is a good time to review not only your life insurance needs, but your overall estate plan. This way, you can make the appropriate adjustments and ensure that everyone you love is taken care of in the most cost-effective manner.