For many people, life insurance and retirement planning are two completely separate vehicles, with retirement planning being for your own benefit while life insurance is primarily geared towards helping your beneficiaries after your death. However, life insurance and retirement intersect in a surprising number of ways: life insurance can supplement your current retirement plans, and it can still provide further benefits to you once you’ve already retired. Here’s a quick look at how the two work together.
Planning for Retirement
A permanent life insurance policy, in addition to providing a constant, dependable level of protection, can also be an effective tool to maximize your retirement plans. When you purchase one of these policies, a portion of your premiums are placed in a separate account that builds cash value in addition to your death benefit, and you would be able to withdraw from this account or borrow against the cash value if the need arises. Some people use this account to make payments in tough financial times, or you can use the funds to save for retirement. However, keep in mind that all loans and withdrawals will lower the policy’s death benefit unless they are repaid, and borrowing more than the surrender value could cause the policy to lapse.
One of the most common questions people ask about life insurance is “Do I still need it once I’ve retired?” or, more specifically, “Do I still need the same amount of coverage?” Regardless of your point in life, the answer to the question “Do I need life insurance?” is always going to be a resounding yes. However, you may not necessarily need to retain the same level of coverage.
If you have any outstanding debts or expenses, you need to financially support someone, or you have loved ones who will live on after you pass, you should still have a life insurance policy. However, if you were previously using life insurance to replace income and have successfully built up investments, it may be a good idea to change your coverage amount to reflect your current everyday life.
If you’ve made it to retirement without a life insurance policy, it’s still not too late to purchase one. Another common misconception is that older people are uninsurable or will find it very difficult to purchase coverage, but it is definitely possible for a senior citizen to purchase a policy, and it is important to do so before it is too late to help your beneficiaries.
About National Catholic Society of Foresters
At National Catholic Society of Foresters, we pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a Fraternal Society, which means the sales from these financial services products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs. Our portfolio is extensive, ranging from various life insurance policies to IRA’s to support your financial needs no matter what stage of life you’re in. For more information, contact our friendly experts today at (800) 344-6273.