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Retiring? Don’t Cancel Your Life Insurance Policy!

You’ve worked your whole life to save money to use for your retirement, and to take care of your loved ones. Now that your retirement is finally approaching, you might be wondering: is it enough? In addition to your savings, do you have a pension or retirement benefits through your former employer, or will you be relying on Social Security – and will it be enough to support your spouse if you are no longer able to? What about if you or your spouse needs long-term care? And will there be any money left for your children or grandchildren? If you’re unsure whether you’ll have enough money for all of these scenarios, a life insurance policy could be the answer. So, if you already have one, don’t cancel it now; if you don’t, you can still find an affordable policy – having one is just as important now as it was when your family was young, and here’s why!

Provides Additional Income

If you are one of the lucky ones who will be getting monthly retirement benefits from your employer, you might think that both you and your spouse will be able to live on that money for the rest of your lives, whoever passes away first. But that is not necessarily the case: depending on the type of monthly payout that you chose, your spouse might not continue receiving your retirement income after you die. If you picked the option of a monthly payout based on your life expectancy instead of a “joint and survivor” benefit option, your benefits will only last for as long as you are alive – and most people do not choose the “joint and survivor” option, because it usually means a smaller monthly payout. Life insurance can replace that monthly income, which will help your spouse with the expenses that they relied on your income for.

Covers Debts

Some of your debts do not disappear when you die, especially if your spouse is a co-signer of the debt. If you’re still paying off your house, car, college tuition, or credit card bills, a life insurance policy will ensure that these debts get paid without your spouse or family struggling. A policy will also ensure that your family can afford your funeral expenses, which will cost, on average, $10,000.

Leave A Legacy

Hopefully you’ve got a great pension or retirement plan that is allowing you and your spouse to pay the bills, and still have money to travel and enjoy your retirement. But what about your children and grandchildren after you pass away? With a life insurance policy, you can leave a legacy for your family when you pass.

Cover Your Long-Term Care

older man pushing an older woman in a wheelchair — *Life insurance can help cover your long-term care, if you add specific riders to your policy.*

Life expectancy is rising, and living longer means you or your spouse might end up needing assistance or long-term care at some point in the future. If you have retirement benefits, they can help pay for your long-term care needs, but what about those for your spouse? There are life insurance riders that you can add onto a policy to help both of you with long-term care in your retirement years. Some of these riders include:

Long-term care rider – Helps with expenses including nursing fees and assisted living costs.
Accelerated death benefit rider – Pays out a portion of your death benefit while you are alive if you are being treated for a terminal illness.
Critical illness benefit rider – Provides early access to benefits for treatment of certain illnesses.

Supplementing your retirement benefits with life insurance will help you and your spouse have peace of mind knowing you’ll be covered if you need extra care.

Other Advantages Of Life Insurance

Aside from helping your spouse and loved ones when you are gone, there are other advantages to supplementing your retirement benefits with a life insurance policy. With certain policies you can:

Build up cash value on a tax-deferred basis
Pay for premiums with your cash value
Borrow money from the cash value tax-deferred
Receive tax benefits for estates and trusts for your family

What Kind Of Policy Should You Get?

There are many life insurance policies to choose from; choosing the right one for you depends on your situation, how much coverage you want, and your budget. Some policies to look into include:

A permanent life insurance policy, such as whole life insurance, which offers coverage that will last your whole life, and will accumulate cash over time.
A term life insurance policy, which is cheaper than permanent life insurance, but only covers you for a specific amount of time (10, 20, 30 years). It can be converted into a permanent life insurance policy when the policy ends, but you might have to pay more for the policy if you renew it.
Guaranteed universal life insurance, which is a hybrid of term and permanent life insurance.
Joint life insurance, which will provide your spouse with a death benefit if you choose a first-to-die policy, or your family if you choose a second-to-die policy.
Final expense life insurance, which will provide benefits for the cost of a funeral and any debts you leave behind. The death benefit amount can be anywhere from $5,000 to $25,000.

These are just some of the different types of life insurance policies you can choose from; you should be aware of all of your options before making a decision. The best way to choose a plan that will most benefit you and your family is by working with an agent and comparing plans. To get you started, we have provided the top insurance companies that offer life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Your retirement benefits will only go so far; by supplementing them with a life insurance policy, you can make sure that you will continue to provide for your loved ones even when you are gone, or that your long-term care needs are met. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Understanding Your Life Insurance Policy

After you’ve made the decision to purchase a life insurance policy to protect your family’s financial future, the next step is actually making sure you understand everything that’s in the policy you’re planning to buy. To do this, you should sit down and read through it so you are clear on your benefits, your obligations, and the ins and outs of how the policy works. Life insurance can be quite complex, and even if your insurance agent explained your chosen policy to you thoroughly, you should still read it thoroughly to make sure everything in it is correct, and that it is the right policy for you. Below are some tips that will make it easier to review and understand your life insurance policy.

Go Over The Declaration Page

papers with graph and writing — *Your declaration page and illustration will show all the basics of your life insurance policy.*

The first few pages of your policy include a declaration page, which contains your basic information, such as:

Personal information
Policy type
Policy dates
Policy number
Your risk class
Any riders you added
Beneficiary information
The amount your loved ones will receive after your death
Exclusions

Look At the Policy Illustration

Life insurance policies will provide you with an illustration, which is a table that shows how your policy will perform at certain interest rates, including how your death benefit, cash value, and premiums can change over time. Look over this information to make sure it is what you talked about or agreed to when purchasing the policy.

gavel and balancing scales — *Review the policy and be aware of your rights to cancel the policy, and whether you can make other changes at any time.*

Review Your Rights

Life insurance policies have a trial period, often referred to as the “free-look period” or “right to return,” which gives you a certain number of days, generally 10-30, to cancel the policy without penalty. This means that, if at any point you feel like this plan is not a good fit for you, you have the option to cancel it and find another policy; make sure you know how long you have to decide.

It is also important to know whether you can change your beneficiary at any time, in case your situation changes, as well as whether you have a grace period for late payments, or if your policy will lapse immediately.

Check Length Of Coverage

Different policies offer different options in terms of how long you will have coverage, so you need to review, calculate, and make sure you will be covered for the right amount of time. If you have chosen term life insurance, you will only be covered for a set period of time, while permanent life insurance will provide coverage for your entire life.

Review Your Death Benefit

Make sure the death benefit is the amount you asked for, and is enough to keep your family financially stable after you are gone. Check how your death benefit is calculated: do you have a guaranteed death benefit (which you get with a term life insurance policy), or can your death benefit change, which can happen with permanent life insurance? Different types of permanent life insurance policies calculate death benefits in different ways:

Whole life provides a guaranteed death benefit for a set premium.
Variable and universal life insurance policies will invest the money you pay in premiums so the death benefit could change based on investment performance.
Universal life insurance allows for adjustable premium payments, but the amount of your death benefit can also change.

Go Over Beneficiary Information and Settlement Options

silhouette of people holding hands with a child in the middle and money bills as the background. — *Make sure the death benefit is enough coverage and that the beneficiary is listed correctly.*

Your policy will allow you to choose two types of beneficiaries, so when reviewing check to make sure this information is correct. The two types of beneficiaries are:

Primary, who will receive your death benefits after you die
Secondary, who will receive the death benefit if the primary beneficiary dies before you do

You should know what the claims process will look like for your beneficiaries, as well as the settlement options for your policy, or how your money will be distributed. In most cases your beneficiaries will receive their payout in one lump sum, but there are alternative settlement options that include different types of annuities, so check what your plan offers.

Look For Riders & Exclusions

If you want to add extra coverage for certain situations, such as if you become disabled while working, make sure to ask that this be added into your policy – you can do this by requesting what are known as “riders.” In addition, check if your policy has any exclusions, or risks that the insurer will not cover, which can limit the distribution of your death benefit. For example, most policies will not pay a death benefit if you commit suicide or die from a drug overdose due to recreational drug use.

When purchasing a life insurance policy, you should always review it thoroughly before you buy, after you buy, and every year that the policy is in effect, so you can make sure that it continues to suit your needs. Life changes and you might need to change your policy, as well – whether it’s your coverage or beneficiary, or whether you need a new life insurance policy altogether. If you need help reviewing your policy, it’s in your best interest to speak to your local agent; if you need help deciding on a policy, consider using online tools to see what is available, as well as working with an agent who will help you compare plans and see which is the right fit for you. To get you started, we have provided the top insurance companies that offer life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

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