Retiring? Dropping Life Insurance Could Be a Costly Mistake

Today, I’d like to explain why life insurance is still important for a person reaching retirement age. Actually, I’m not talking about life insurance planning in the traditional sense. Newly married couples or young families or people who’ve got mortgages or debts, that’s one reason for life insurance. This is about life insurance for what we call our senior population, by which I mean anybody over the age of 50. 

The question is, why does this person need life insurance or what should they do with their life insurance? Once the children are grown or the debts are paid, the house is paid off, why do they need life insurance at that time? My number one advice in the area comes under the heading of long-term healthcare costs.

I’m not talking about a long-term care policy. That’s a special insurance policy that would pay for specific long-term care expenses. 

The Life Insurance Needs of an Older Person or Couple

What I’m referring to is a married couple or a single person now of a senior age who may need to spend assets or cash hiring private duty nursing, maybe paying for children to come help modify the home. That person may possibly even need to move residencies. 

But now that person is using their personal cash. In their financial plans, they wanted that cash to be used for their beneficiaries. In other words, they wanted it to go to their wife or children. They wanted to do whatever they wanted with it. But they just spent a large amount of money on long-term healthcare costs. Their life insurance now is the number one cost-effective vehicle to replenish that cash back to their estate.

Let’s get specific and say that you’re now faced with a healthcare episode. You’ve spent $100,000 on that care. If you die, there is now $100,000 in life insurance paying back those expenses. 

Let’s look at the situation for a married person. You’re both 75 years of age and now one has ill health and you’ve had to spend cash. Now, the surviving spouse not only is faced with their husband’s or wife’s death, but now they just spent $100,000, $200,000 or $300,000 of their estate, taking care of the spouse’s needs. What does their spouse have for their cash for their remaining years?

Life Insurance Is a Cost-Effective Way to Replace That Cash

Life insurance is the most cost-effective way to replenish that fund. I would like to talk to you further about that and how to plan for these late-in-life expenses. As you can see, your life insurance is very important beyond covering expenses for your children. 

Call, text, or email us anytime and we’ll walk you through your planning: (314) 544-5400.

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