Three Steps To Tell If You Should Keep Your Life Insurance After Retiring
Posted on: 4 November 2015
Retiring is a big step and one you're probably looking forward to a lot. It takes a lot of planning to get to that stage, though. You have to tie up all your business affairs elegantly, and one of the decisions you'll have to make is whether you'll keep your life insurance once you've stopped earning your monthly income. Depending on what type it is and your personal situation, you may decide to keep it, change the policy, or give it up altogether. Here are three steps to help you decide which is best for you.
1. Determine if anyone is dependent upon your income
If you retired early and some of your children are still minors and dependent on you for support, life insurance will be necessary to protect them. The same applies if you've recently adopted a child or are the legal guardian or primary provider for any dependent person. Even if you don't have any dependents, your retirement income may be a crucial support for your household's lifestyle. If you're married or living with anyone, check the finances to see what would happen to the rest of the household if your income stopped. If the results are less than ideal, you'll need to keep enough life insurance to protect your retirement income.
2. Assess your estate
If you have a large estate, it may be subject to estate taxes upon your death. These taxes can be very heavy and add a considerable burden to your remaining family as they try to go on with life and shoulder burial expenses as well. If your estate is large, you should consider keeping your life insurance to defray the cost of estate taxes.
3. Decide if you want to leave money to anyone
Life insurance is a great way to leave money to people even if you don't have the money in hand to give them now. You can purchase individual policies to benefit a favorite charity or a particular family member or friend. The small investment can pay off in the form of a large sum of money paid toward whichever cause or person you stipulate.
Use these three steps to come to a decision on whether or not you'll need to have life insurance during your retirement. Then, if you've decided you do, determine the amount you'll need, which may be less than you needed when you had a business and several dependents to protect. If you don't need as much life insurance as you had during your career, it's time to look into taking out a smaller policy or, if you prefer, several smaller policies with different beneficiaries.
For more information, talk to insurance agents like Amberg Insurance Center Inc.
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