Many retirees have reached a point where they are financially stable and may not see the need for life insurance. Some people may think they don't qualify or can't pay the premiums. Some people also think that ethos life insurance is only for those with young families, people who depend on them, or big debts.
Some people may see the need for life insurance more than others, but there are still many reasons why retirees should have life insurance.
What do retirees get out of having life insurance?
Everyone's financial situation is different, but there are a few good things about life insurance that can help retirees. It's important to remember that life insurance isn't for you, the insured, but for your beneficiaries. After you die, the people in charge of your estate may have to pay for your funeral, your debts, and your taxes. Your partner or kids, especially if they depend on you for money, might not have enough money to pay for these costs.
Cover final expenses
Funerals and other memorials can cost a lot of money. Prices depend on what services are used, but the average cost of a funeral in the United States was almost $8,000 last year.
It's hard enough to go through a funeral and burial for a close family member or friend without having to worry about how to pay for it all. Having life insurance to cover these costs can help your loved ones deal with their grief without having to worry about money.
Pay off any debts you owe.
About 20% of retired people still have a mortgage, and about 67% of retired people have credit card debt. Some may sell their home, move to a smaller one, and use the money left over to supplement their other income. Others may get a reverse mortgage or home equity line of credit on their home.
Using life insurance as a financial tool can help you feel less stressed and more ready for retirement and the rest of your life. If you die, you will still have to pay off any debts you have. But the money from a life insurance policy could help your family pay off any bills or debts you owed when you died.
Provide financial support
If you have a partner, they might not get the same amount of money from your pension that you got before you died. Some pensions give a surviving partner a smaller share, and some only give money for a certain amount of time. If you die, your partner's income could go down because of it. You may also have children who depend on you or other people in your life who need money. Life insurance can give those who depend on you a way to replace your income and keep up their standard of living.
Support a charitable cause
If it's important to you to give back and help something bigger than yourself, life insurance can be a great way to do that. A lot of people care deeply about a cause or charity. Did you know that the money from your life insurance can be given to a charity of your choice? You can also use the death benefit to leave a lasting gift, like a scholarship, that will keep on giving.
Give a benefit that isn't taxed.
Most life insurance payouts are not taxed. Other parts of your estate may be taxed, which would cut down on the amount of money your beneficiaries could get. A life insurance policy can help pay the taxes that need to be paid so that your beneficiaries can keep all of what you leave them.
Whether you need life insurance or not
There are two main things to think about when thinking about life insurance: how much you need and how much it will cost. Using a life insurance calculator can help you figure out how much life insurance your family needs. After you use the calculator, you should compare life insurance policies to make sure you get the one that meets your needs the best. A professional who knows about insurance can help you get started.
Life insurance can give retired people peace of mind, among other things. The money from your insurance can give your beneficiaries a steady income, pay for your funeral, pay off your debts, and help you leave a legacy. A life insurance policy is a good way to make sure that your family will be taken care of after you die.
But things do happen. Life insurance can still help in the event of a sudden death, illness, or other terrible, unplanned event.
Life insurance gives your loved ones money in case something happens to you. You may have just gotten engaged, just gotten married, or have young children. If so, life insurance is a must.
Even if that isn't the case for you yet, life insurance is still a great way to start saving money that you can pass on or use later in life. It's also a safety net to make sure you don't die leaving your family with debts you haven't paid.
The first step in choosing the best kind of life insurance for you is to learn about the different kinds.
Life Insurance for a Term
Most of the time, term life insurance is the cheaper option. It protects you for a certain number of years, usually between 10 and 30. If you die during this time, your beneficiary will get the death benefit. The problem with term insurance is that it doesn't have any cash value once it's over.
Permanent Life Insurance
Permanent life insurance for children is usually more expensive than term life insurance because it covers you for the rest of your life as long as you pay your premiums. Permanent insurance gives you both a death benefit and a cash value. As the value of your plan goes up, you can take out a loan or take money out as needed. Even though these policies are more expensive, they are a great way to build wealth and take care of long-term financial obligations.
Life insurance pros and cons for Generation Z:
Different life insurance policies have different pros and cons, so make sure you do your research before making a choice.
Pros
Gives your family a financial safety net after you die.
While you're young and healthy, you can lock in lower rates.
Depending on the plan you choose, it's cheap.
Start making money so you can leave something behind.
Make sure you pay off any debts, like student loans, so you don't have to give them to your parents.
Cons
Depending on the plan you choose, it can be pricey.
You might not end up using the insurance, which could be a good thing.
It can be hard to find and choose the best policy for you.
Life Insurance Trends for Gen Z
The 2022 Insurance Barometer Study found that only 34% of Gen Z have life insurance, even though they need it a lot. When asked why they don't have life insurance, this generation is much more likely to say they don't know enough about the products or that they wouldn't be able to get coverage.
A New Way to Look at Life Insurance
As companies try to appeal to younger people by making everything more digital, it might seem like Gen Z would want to get life insurance that can only be done online. But the same Barometer Study shows that they are the generation most likely to say they would look into insurance online but buy it in person. Gen Z still wants to talk to someone face-to-face about this important choice.
If this sounds like you and you want help with the process, we suggest you talk to someone who works in insurance. Check out the Agent Locator on Life Happens to find one near you. An agent can help you compare products and insurance companies so that you can find the best solution for your situation.
No comments yet