This article first appeared on Forbes.
Life insurance is a critical component of financial planning. It is something to consider before retiring, but there are advantages to having life insurance after retiring.
The Number One Reason For Life Insurance
While no one wants to think of dying, it is a natural part of life. So, life insurance should be considered a natural part of caring for those we love and support financially. It can save families in the darkest of days, both before and after retiring.
Topics to Consider Before Canceling Life Insurance
The lives we love continue long after retirement, which alone is an excellent reason to consider why life insurance should be part of retirement planning. But there are many layers of benefits and benefactors of maintaining life insurance even after retiring.
There are two initial questions to consider on this topic before proceeding to cancel life insurance. One, should something happen, does someone you care for require more money than your retirement savings? Two, are there people or organizations to whom you want to guarantee a considerable amount of money when you pass?
If the answer is yes to either question, then life insurance after retiring is essential. If, however, you have enough assets to cover yourself comfortably and anyone you support once you die, then it is safe to cancel your life insurance policy.
Loved Ones Who Benefit From Life Insurance After Retiring
Having life insurance after retiring is vital if your savings will not comfortably cover someone who is financially dependent upon you after you pass. This person can be a spouse, partner, special needs child, sibling, or other family members who will require more than your savings so they may live the life you want for them.
The Passing of Pensions
One common scenario for keeping life insurance is in the case of retirement pension distributions. Often these savings are only allocated to the person who worked for the company and not to that person’s spouse or partner. So, if the eligible person dies, the surviving partner may be left with only a fraction, if any, of those monthly dollars.
The Special Needs Loved One
Caring for someone with special needs is an enormous responsibility that often extends beyond retirement. These individuals require guaranteed financial support long after their caretaker is gone. Life insurance helps to ensure their care continues for life, and your financial advisor may set up funds in trusts to allocate benefits properly.
Caring For All Generations
Spousal support and individuals with special needs are essential recipients of life insurance benefits after retirement. But there are other people for whom you may want to ensure a specific allocation of funds once you pass away.
Many people retire with plenty of savings for themselves and the spouse or partner who may live longer. But to keep from jeopardizing the well-being of those who need these savings, life insurance plans maintained after retirement can be allocated to other recipients. These funds may be used towards the ever-increasing costs of continued education or other expenses that help to create a happy and healthy lifestyle for grandchildren and future generations.
Giving Back Long After You Are Gone
The beauty of charity is that it may continue even after one dies. Distributions from life insurance policies kept after retirement may be gifted to non-profit institutions, charities, or other organizations for whom you are interested in leaving a generous donation. While these entities may not require your funds, these meaningful dollars are always appreciated.
Life Insurance Is Always A Good Policy
Retiring in wealth, health, and happiness is a goal you work towards your entire life. And in the case where you can afford to maintain a life insurance policy even after retiring, there will almost always be a grateful recipient of these purposeful allocations that will forever keep you in memory.
A trusted financial advisor who truly understands your lifestyle is best equipped to guide you on making the right choice about life insurance after retirement. This wealth management expert is undoubtedly the one to help insure you support your loved ones financially, and they are often the ones who will keep your legacy alive forever.