You’re a retired senior. Your kids don’t rely on you anymore because they’re self-sufficient and your mortgage is paid. So you don’t have to carry on with life insurance, right? Maybe not, but in some cases, you might want to.
You’re correct for the most part according to many financial planners, Life Insurance is meant to replace income, pay debt or leave a legacy if a policyholder dies prematurely.
If you’re not working anymore, you don’t have income to replace but you may have debt or legacy needs. But, before you let your policy lapse, you should consider your personal financial picture.
There are a number of reasons why you may want a small whole life insurance policy in retirement.
When Whole Life Insurance for Seniors and Retirees Makes Sense
There’s a case to be made for having a whole life insurance policy as part of a well balanced portfolio, particularly if you’re affluent and risk averse. Many whole life policies with cash value are offering tax sheltered dividends of about 6 per cent, while banks are offering GIC’s with taxable interest rates of 1 or 2 per cent or less.
The argument can be made that due to it’s tax advantage, buying whole life insurance is sound financial and estate planning.
It’s important to note that whole life insurance policy critics argue that investment choices are too limited with whole life (that’s the point), and that investors could get a better ROI with a diversified portfolio of stocks. But, for the majority of seniors and retirees, the simplicity of a whole life policy that provides a death benefit and has cash value is the perfect solution.
The money in a whole life insurance policy is valuable as an immediate source of cash for your named beneficiaries. This liquidity allows them to use if for your final and funeral expenses, as well as estate income tax, without having to sell assets, such as jewelry, property, depreciated stocks or the family business.
Leaving a Legacy
Rather than making donations each year to your favorite charity, you can take the amount of money you donate and use it to buy a whole life insurance policy and pay the premiums with the annual donation amount. If structured correctly, a whole life insurance policy can significantly benefit the recipient as well as the policyholder and the life insured’s family with respect to the gifted policy.
If you’re a retired parent of a disabled child who’ll need ongoing care such as assisted living or medical support, you should purchase whole life insurance. The coverage amount should be enough to pay for your child’s projected expenses for as long as they’re expected to live.
Gifting to the Grandchildren
Maybe you would simply like to leave 5K or 10K to each of your grandchildren as a parting gift for whatever they wish to do with it.
At Shelter Bay Financial Corp., we specialize in whole life insurance of all types from fully underwritten to guaranteed issue policies with no medical questions at all. We will answer your questions in simple straight forward language and give you the information you need to make an educated decision.
We offer our appointments online or over the phone – using screen share software, you can be at your computer or tablet and see what we see – your illustrations and application progress in real time and we can even give you control of the mouse to sign the application.
To find out more, please call toll free to 1.888.498.5288.