Life Insurance Considerations When Planning for Retirement
Not only can life insurance give you peace of mind, it has many other benefits too. This is especially true when it comes to planning for your retirement. Here's a look at why life insurance is still a necessity in retirement for the following reasons:
- Married individuals with pension plans may be offered a number of options of payouts to choose from when they retire. Life insurance may be a solution to enabling an individual to select an option giving a greater payout than electing the spousal benefit option. The death benefit of a life insurance policy is payable income tax free to the beneficiary. The beneficiary has numerous options of payouts from the insurance company permitting the beneficiary to choose the right payout option for them. The retiree, who was the insured, may cancel the policy if the spouse predeceases the retiree or continue the policy with a change of beneficiary to other family members.
- There may be many factors to consider when making the proper election. All factors should be considered when making an election. Life insurance is an excellent plan to supplement retirement income for surviving spouses, as often times there is a reduction of retirement income when a spouse dies. The concern with trying to rely on savings and investments to supplement retirement income is that investments and savings may vary due to performance or emergencies requiring the liquidation of assets. The opportunity to earn income to supplement retirement income may not be an option due to age, health or personal choice.
- Life insurance can be an integral part of estate planning. Life insurance proceeds are paid income tax free to the beneficiary and can be used to provide the liquidity needed to pay off outstanding debts, final expenses such as funeral expenses and potential estate and state death taxes. Proper estate planning can determine the amount of expenses the heirs may incur and determine the amount of life insurance required. Proper ownership of the life insurance policies will be an important consideration when purchasing life insurance.
About the author: Ken Buccico holds a LUTC designation and has been in the life insurance business for 39 years. His wealth of experience empowers clients to make best possible decision regarding a life insurance policy. To explore the best life insurance option, contact Ken at 1-800-651-1953 or KBuccico@Pivot.com.