Do empty nesters need life insurance?
While most financial experts think you don’t need coverage once the kids have flown the coop, there are reasons you still may want or need a life insurance policy. If you contribute to your children’s, grandchildren’s or parents’ financial support, you may want to continue to pay for a term life insurance policy. Life insurance proceeds can also fill the gap for “lost” retirement savings if you die prematurely or before Social Security kicks in, enabling your survivors to continue making payments on major debts like a mortgage, a home equity loan or a car loan. Life insurance proceeds can also help pay for medical expenses if medical coverage is lost before Medicare kicks in. To calculate how much life insurance you need, add up how much income you bring in and how much your spouse would have in retirement if you died. If your assets, pension and savings won’t be enough, you may want to buy a term life insurance policy.
• Quite possibly. Here are 10 reasons to own life insurance after your kids have left home: • To meet goals: If your children are in college and/or not completely financially independent, life insurance can help “finish the job.” Although you may have saved enough for tuition, the kids’ living expenses (e.g., room and board, laundry, entertainment/activity costs, etc.) continue, but not Social Security benefit payments for the surviving spouse and children—they stop when the kids leave high school. • To support other dependents: If you have parents, disabled adult children, or others who depend on you for financial support, life insurance would continue this support if you die before they do. • To cover the Social Security “blackout period: A recent study showed that 5 percent of married women ages 51-64 were poor, but 20 percent of widows that age were poor. This happens because many people don’t plan for life insurance to pay income to the surviving spouse after their kids are grown.
Related Questions
- Why is it better to have an irrevocable life insurance trust purchase alife insurance policy on the donor, rather than have the heirs themselves own a permanent life insurance policy with the premium paid by the heirs with gifts by the now- living donor?
- Do life insurance renewal commissions count as wages?
- Do empty nesters need life insurance?
