Life Insurance for Seniors

Who needs it, anyway?

If your kids are grown and your mortgage is paid off, you may think your need for life insurance has passed. But chances are, if you love someone, life insurance can play an important role in your overall financial plan, no matter what stage of life you're in.

Here are some key reasons why:

If you're still working, it can replace the income that pays for the lifestyle you and your spouse enjoy. If you died today, your partner could outlive you by 10, 20 or 30 years. Is your current financial plan adequate? Or would the person you love be left wondering how to manage financially after you're gone? Life insurance can cover daily living expenses, pay the mortgage or simply ensure your mate will continue to maintain the standard of living you've worked so hard to achieve.

If you're retired, life insurance can supplement your retirement income. If you own a permanent policy but no longer have anyone who's financially dependent on you, you can annuitize it so that it provides monthly payments.

Life insurance can provide the funds to cover your final expenses. The average funeral costs about $6,000 these days,* and there may be medical bills, taxes and attorney fees related to settling your estate as well. And if you die with debt, you may be leaving an extra financial burden for loved ones to bear.

It can enable you to pass more onto your children and grandchildren. Certain types of insurance, like single pay whole life, are ideal for wealth transfer because the single payment gets multiplied as soon as you purchase the policy, resulting in a death benefit that's much larger than the original payment. If you're in your 50s, for example, it could be more than double.

Life insurance also gives you tax advantages no other financial vehicles offer. The death benefit from a life insurance policy passes income tax-free under current tax law, so your heirs get more than they would if your money were in a taxable vehicle like a CD. It also avoids the costs and delays of probate, so your beneficiaries have one less thing to worry about at a stressful time in their lives.

If you've accumulated a large estate, life insurance can help foot the estate tax bill from Uncle Sam, preserving assets for family.

If you're supporting aging parents, life insurance can provide the funds they'll need for quality healthcare and a place to live should something happen to you.

Life insurance isn't something you think about every day. But it's something most people need as part of their overall financial plan. A qualified agent can help you make the most of what you have for the people you love.

* Source: National Funeral Directors Association