Summary

The article outlines three reasons why retirees might consider maintaining or acquiring life insurance to address legacy goals, long-term care needs, and income replacement for survivors.

Abstract

The article "3 Reasons You May Want Some of Your Own Life Insurance in Retirement (and what type makes sense)!" discusses the relevance of life insurance during retirement. It suggests that while many retirees may no longer need life insurance, there are specific scenarios where it becomes beneficial. These scenarios include leaving a tax-free legacy to loved ones, planning for long-term care expenses, and ensuring income replacement for a surviving spouse in the event of a pension holder's death. The article emphasizes the importance of selecting the right type of policy for each goal, such as joint-life or indexed policies for legacy purposes, indexed universal life policies with long-term care riders for leveraged long-term care benefits, and term or universal life policies for income replacement. It also encourages readers to consider their personal goals and to consult with the author for tailored advice.

Opinions

The author posits that for many retirees, the need for life insurance may no longer exist.
A joint-life, estate-type policy or a low-cost indexed policy is recommended for those looking to transfer wealth effectively and tax-free to their loved ones.
An indexed universal life policy with a long-term care rider is seen as the best way to accumulate cash value and provide a significant benefit for potential long-term care needs, while also offering a tax-free legacy if long-term care is not required.
The article suggests that term or universal life policies with a focus on death benefit rather than cash value are ideal for income replacement to compensate for reduced pension income upon the death of the pension holder.
Personal goals should guide the structuring of life insurance contracts, and professional advice is encouraged for a more customized insurance solution.

3 Reasons You May Want Some of Your Own Life Insurance in Retirement (and what type makes sense)!

Photo by Xavier Mouton Photographie on Unsplash

(don’t forget to checkout the video too)

A lot of people have some life insurance through work and wonder what they should do when they retire.

The first question I would ask is, “do you even need it anymore”⁉️

For a lot of people in retirement they don’t have a need for life insurance anymore 🤝

However, here are 3 reasons you may want (some) life insurance IN retirement:

✅ A Legacy Goal

If you want to leave tax-free money to loved ones, then you likely will want some life insurance to effectively transfer wealth to your loved ones.

The best type of policy for this is usually a joint-life, estate-type policy, or some type of low-cost indexed policy.

This will provide the maximum death benefit with no real cash value, and will be the most effective way to transfer tax-free wealth to somebody you love. ❤️

(note: this should be a secondary goal to your own retirement plan) 💯

✅ Long-term Care (+ legacy)

If you’re looking to provide a leveraged benefit for a possible long-term care event then an indexed universal life policy with a long-term care rider is best way to accumulate cash value and grow your benefit for long-term care.

What’s really nice is that if you don’t need the long-term care portion, this serves as a great way to pass along the value of that contract to your loved ones tax-free as well!

✅ Income Replacement

Let’s say you have a pension but the survivor benefit is only 50%….

That means that the surviving spouse loses half of the pension income if you were to prematurely pass away.

This can be a devastating situation for the surviving spouse…😫

He or she not only loses the love of his or her life, but now also loses the bulk of their retirement income 😟

The best way to cover this gap is to provide money that can be used for income replacement for the surviving spouse.

The best type of policy for this is likely a term or universal life policy that has a large death benefit with a smaller premium (and no real cash value).

There are a lot of ways to structure life insurance contracts, so it’s important to know what YOUR goals are.

Let’s chat 💬😎

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Enjoy this blog? You’ll probably enjoy this one as well: Should I Make 401k Contributions While I’m Doing Roth Conversions?!

PS: I have an automated platform that allows you to shop for simplified life insurance solutions (on your own), but if you are looking for a more customized solution, then feel free to reach out to me directly.

To your success,

Matt