What's the Point of Life Insurance?

When you were raising a young family, you no doubt understood that carrying a life insurance policy was vital to protecting their future. But now, as you near retirement (or maybe you're already retired), your children are out of the house and supporting themselves. You may be wondering whether life insurance is even still necessary. But before you drop your policy, consider these important ways life insurance can still benefit you.

Provide for your spouse. Even if you no longer need to worry about your children, your spouse might still depend upon your income. If you currently receive Social Security benefits, consider the fact that survivor benefits for your spouse may not be enough to cover their expenses. If you have a mortgage or other debts, life insurance is still important to help your spouse maintain their standard of living after your passing.

Leave a legacy. None of us can predict the circumstances surrounding the end of our lives. But often an illness or old age can lead to high medical bills and other types of debt. Naturally, there may also be some legal fees involved in settling your estate. Since life insurance death benefits are paid quickly, and are not usually subject to income taxes, your life insurance policy could provide your heirs with timely relief from financial burdens at an already difficult time. Any amount left over from paying your estate's debts can be passed to your beneficiaries as a final gift.

Is your term life insurance policy expiring? You may have previously purchased a term life insurance policy, which usually carries lower premiums than other types of life insurance. But since term life insurance only provides coverage for a specific length of time, you policy may be expiring soon. Ask your insurance agent about extending the length of the policy or converting to a permanent life insurance policy. Depending on your circumstances, it may also be better to simply purchase a new policy.

No matter how long you live, the premiums on your permanent life insurance policy will remain the same for as long as you live. A portion of your premiums will go into a cash-value account, where the funds accumulate on a tax-deferred basis. Rates for permanent life insurance policies vary based on factors such as health status and age. Talk to you insurance agent about selecting a permanent life insurance policies that is right for you.
​
13767
This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional.  The statements and opinions expressed are those of the author and are subject to change at any time.  All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only.  It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This material only provides highlights of this product--please refer to the product disclosure for information regarding exclusions, limitations, reductions of benefits and terms, including costs and complete details of coverage.