After I retire, will I need a life insurance policy?
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Asked June 17, 2013
Life insurance is important for anyone who wants to preserve their property after death, or protect their family from financial hardships related to their passing away. A popular misconception about life insurance is that you do not need it until you are older. The truth is, a permanent life insurance policy will work best for you if you purchase it as soon as possible rather than wait until you retire.
Life insurance costs more as you get older. Because the risk of death increases as you age, insurance companies also charge higher premiums. Additionally, your health may deteriorate over time, making it more difficult to get coverage or more expensive to buy it. If you wait until you retire to buy a policy, you may pay twice as much as if you had bought the policy in your 20's or 30's.
A life insurance policy should be able to pay for your family's living expenses for a period of 3 to 5 years or even longer. It should also be able to provide for college tuition for your kids, or any other goals you have for your family. A good rule of thumb for a basic permanent life insurance policy is to calculate the total bills of your household for 5 years, add the expected cost of college tuition, and multiple the total by 5 percent to account for future inflation. Your individual needs will vary, but this will give you a basic idea of what the policy should encompass.
At the very least, you should pick up a policy for your final expenses. If you wait until you have retired or your health has deteriorated, this type of policy may turn out to be the only life insurance option you have available. This type of policy does not provide benefits to beneficiaries the way other policies do, but instead pays directly to a funeral director who handles your funeral and other final expenses. Speak with a licensed agent to get more information about your options.
Answered June 17, 2013 by Anonymous