Retirement may be stressful for many Baby Boomers.
Are you a Baby Boomer?
Do you have a loved one in this demographic?
If yes, your retirement may hold some harsh realities.
According to a recent Insurance News Net article titled “How To Use Life Insurance In Better Estate Planning,” many Baby Boomers in the middle income bracket have a debt problem.
In fact, many will be taking this debt into retirement.
What can you do?
Life insurance can be helpful.
Although life insurance can provide income replacement for a family when a breadwinner dies during his working years, its benefits never really cease.
Do you have any debts right now or will you have any expenses resulting from your passing?
Take inventory of your assets and your liabilities.
You may not need the insurance to cover your debts.
What if you do?
You can use life insurance to take the burden of mortgages, funerals, and other end-of-life expenses from your loved ones.
Select the right type of policy.
Whole life, term life, and universal life are the three major types of coverage.
All pay a death benefit, but terms will vary considerably.
Bottom line: you need to purchase coverage that will be in existence when needed.
Term insurance, for example, has premiums that increase with age.
As you get closer to your "last birthday," actuarially speaking, the price of the premiums for your life insurance may become unaffordable.
You may be financially forced to drop the policy, just when needed most.
Choose an appropriate amount.
In addition to the right type of policy, you should purchase the right amount of coverage for your current and projected needs.
Ask yourself a few key questions.
What expenses will your family have after debts are paid?
How much can I budget from my current cash flow and savings to make sure I have enough life insurance to pay off those debts and expenses were I to die today?
Working with an experienced financial advisor and estate planning attorney can help you determine how to make life insurance best fit your needs.
Do not delay, however.
Your health actually "buys" the life insurance, your dollars simply pay the premiums.
Reference: Insurance News Net (January 7, 2019) “How To Use Life Insurance In Better Estate Planning”