A. Most people think of life insurance only when they want to protect their family and provide a source of replacement income in the event of their deaths. At age 60 or older, your children are grown and gone, the mortgage is paid off, you have minimum debts, so do you still need life insurance?
Well, the answer is yes, because you need to realize that life insurance could be a buffer to lost assets due to market volatility at your retirement time, for example, when the market crashes and you die before you have the time to rebuild or replace the lost assets.
Here are 20 reasons for life insurance after age 60:
- Offset loss of retirement income to spouse at death.(Pension max)
- Pay costs associated with death
- Pay final expenses
- Pay estate and inheritance taxes
- Pay off debts
- Pay income in respect of a decedent taxes on IRAs, 401(k)s etc
- Provide for the care of a disabled child, spouse, etc.
- Offset loss of key person in a small business
- Provide funds to buy out interests of a deceased business partner or co-shareholder
- Dividends can be a tax-free source of supplemental retirement income.
- Cash surrender values are a source of emergency funds during life.
- Cash surrender values can be wholly or partially annuitized to provide additional guaranteed lifetime income.
- Any unused funds can be used to provide a gift to grandchildren.
- Provide a gift to charity at death or prior if desired.
- It adds flexibility to the estate plan.
- It allows parents to balance uneven distributions of property or business interests to children.
- It allows parents to spend all their money and still leave a legacy to their children or grandchildren.
- It is creditor proof in most states.
- It can be designed to provide an “inevitable gain,” no matter when one dies.
- It can collateralize loans. As people live longer, they tend to take on more debt or debt that has a longer amortization (just look at all the big houses being built by people who consist of a family of two post-65 adults!)
Review your personal situation. You may find there are more reasons to own life insurance after age 60 than you think.