Life insurance after retirement
[social_share]Most people purchase life insurance during their most productive years, to support those who are dependent on them should disaster strike. It’s often assumed this insurance is no longer necessary past the age of retirement, but this is not always the case.
In many cases a wage earner is not only supporting themselves, but also a number of other people. Life insurance is purchased to provide for these dependents and support them following the death or disability of the wage earner. When the wage earner retires, he or she may find themselves still supporting some family members, perhaps a spouse or special needs adult child, although probably at a lower level than before.
As well, the retiree may find that what was considered an adequate pension is not. Perhaps a combination of boredom and necessity will encourage the retiree to resume some work, possibly with fewer hours or less responsibility, or on a consultancy basis. The wage earner may have underestimated how much financial support was required by his or her family, and in these situations life insurance remains as important as before.
Another reason to continue carrying life insurance following retirement is when the spouse is not covered, or not covered adequately, by the wage earner’s survivorship clause. Most pensions allow for the surviving spouse to continue receiving the wage earner’s pension, although the total amount may be reduced. But not all pensions allow for this, and even those that do may not allow for cohabiting couples or a marriage that occurred after the pension began payments. In these cases life insurance can help the spouse left behind.
Funeral costs are another reason for a person to carry life insurance at any age. Funerals are stressful for families, and disputes over funeral costs can only add to this stress. Life insurance that is designed to cover funeral costs can defuse the tension, as well as ensuring that none of the family is burdened.
