To make the long story short: most people think of life insurance mainly when they want to protect their family and provide a source of replacement income in the event of their death. They don’t think of it as a replacement to lost assets due to market crisis. Is it right thing to do?
The reasons for that are children are grown and gone, the mortgage is paid off, you have minimal debts. So, why should someone 60 or older consider purchasing permanent life insurance?
Here are 20 reasons for life insurance after age of 60:
- Offset loss of retirement income to spouse at death
- 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 a 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
- You can balance uneven distributions of property or business interests to your children
- You can spend all your money and still leave a legacy for your children or grandchildren
- It’s creditor proof in most states
- It can be designed to provide an “inevitable gain,” no matter when you die
- It can collateralize loans. As people live longer, they tend to take on more debt or debt that has a longer amortization.
Review your personal situation. You may find there are more reasons to own life insurance after age 60 than you think.
The source post by Marvin H. Feldman in available at https://lifehappens.org/blog/20-reasons-not-to-jettison-your-life-insurance-after-60/