Retirement is an important part of our lives. After working hard for years, we can finally take some well-earned time for ourselves. We need peace of mind to enjoy this time, and what provides that reassurance better than a quality insurance policy? However, post-retirement insurance can get a little confusing, especially when it comes to life insurance. Many people drop it after they retire, but that’s not advisable for everyone. Learn whether you should keep your life insurance once your job ends and how retiring affects your car insurance.
Is Life Insurance a Good Investment After Retirement?
Most individuals maintain life insurance throughout their lives if it’s being supplied by the company they work for. However, once you retire, life insurance is no longer a given. If you choose to carry life insurance into your retirement years, you’ll probably be paying for it out of pocket, so make sure it’s worth the money. In general, whether you should keep your life insurance comes down to your personal needs as a retiree. Here are some questions to ask yourself before deciding to maintain or cancel your life insurance.
Are You Still Earning Income?
Life insurance is meant to protect your family members against financial loss should you pass away. Essentially, it’s meant to replace your income in case you’re the primary earner in the household. Based on this alone, you may already know if you need life insurance. If you aren’t working anymore because you’re living on retirement funds or social security, you may not need life insurance as there’s no income to replace should something happen to you.
In addition, if you die, your family will receive compensation from your retirement accounts and a survivor benefit from your social security. However, the amount depends on your financial situation and is typically smaller than the amount you received when you were alive.
How Do You Want to Leave Your Loved Ones After Your Life?
While your loved ones will receive payouts from your social security account and any retirement funds you have, life insurance gives you the option to leave a tax-free benefit to your loved ones after you die. These benefits typically aren’t subject to probate laws, or the laws that decide who gets what once you pass away.
Do You Have Any Debt?
We all hope to enter retirement debt free, but that’s not possible for everyone. Many individuals will be paying off their mortgage, or even their student debts, well into their adulthood. If you’re worried about passing away before you repay your debt, maintaining life insurance might be worth your money. If you die, your life insurance will likely pay off your debts so they don’t become a burden for your loved ones.
Do You Have a Permanent Policy?
Life insurance policies are known for paying out benefits after the policy holder dies. However, some life insurance policies make these benefits available while the person is still alive if certain stipulations are met. These benefits are called accelerated death benefits, and they allow you or your family members to access insurance money if you get a terminal illness, need nursing home care, or require intense medical treatment. Their main purpose is to help you and your loved ones pay for your medical care if needed.
Does Retiring Affect Your Car Insurance?
Now that we’ve covered life insurance, let’s discuss car insurance. Depending on your situation, retiring may increase or reduce your car insurance rates. Unfortunately, many insurers consider drivers over 65 as high risk, which can result in higher premiums. The good news is, depending on their age and how often they use their car, many drivers save on car insurance once they enter retirement. Ask your insurer if they offer any of the discounts for their retired drivers or for drivers who aren’t using their car to commute anymore.
If you’re a retired driver and you’re looking for a cheap policy, consider driving with The General.
While some insurers see you as high risk, we believe that older drivers are experienced drivers who deserve an affordable car insurance policy. You can get a free insurance quote from The General in under two minutes or read more articles like this on our insurance blog.
