When you are approaching retirement, those last ten years or so of your full-time career are an essential period in your financial plan. Your financial goals are different now than when you were just starting out, and you probably look at your life insurance in a much different way than when you first began your career or started your family and purchased your first life insurance policy.
Looking back at your first life insurance purchase, maybe it was when you and your partner got married or bought your first house, or perhaps you have a beautiful memory of protecting your family when your first child was born. Along with adult responsibilities came the need for life insurance, and now that you are looking forward to retiring in the next decade, your life insurance needs are evolving, too.
The great news is you still can get life insurance at a competitive rate, even in your fifties and sixties, especially compared to if you wait. People approaching retirement should consider life insurance an important purchase, and now is the time to review your existing policies and determine if you need more coverage.
Your agent or financial advisor can help you decide if you need additional life insurance and help you with your financial plan as you approach retirement. Read on to learn more about insurance planning for near-retirees, then reach out to us at Hometown Life Insurance to learn how we can help with your specific plans.
The Decade Before Retirement Is Critical for Life Insurance
Many people wonder if they need to keep their life insurance after they retire, since by this point in your life you may have already paid off your home and your children’s education. Your career has likely yielded many financial benefits for you and your family. But life insurance continues to play an important role in the decade approaching your retirement and even after you have departed your career and started enjoying your golden years. Life insurance is a great way to supplement your Canada Pension Plan and your other savings.
People approaching retirement age can still buy life insurance. While your premiums for life insurance will likely be higher in your fifties than in your twenties, your rates will certainly be lower than if you waited. Canadians in their later years may struggle to find affordable life insurance, so if you are still in relatively good health, you can still secure reasonable premiums for your coverage.
Purchasing an additional life insurance policy before retirement can supplement your financial plan for your family. Consider the future needs of your family after your retirement. Without your ongoing income, your family may struggle to pay off debt or continue their current quality of life, even if your home is already paid off. Hence, leaving an additional life insurance policy can help secure your family’s financial future.
Leave a charitable donation through a life insurance policy. A life well-lived has likely generated many interests and hobbies, and through a life insurance policy, you can choose to leave a gift to a charitable institution to support your interests after your death. You may name anyone you would like as your beneficiary, so consider adding a life insurance policy to gift funds to a charity of your choice. As you sort through your estate and future plans, you might decide you want to leave funds to support causes important to you. Thus, purchasing a life insurance policy as you approach retirement can help fund this philanthropy.
Life insurance can give you access to cash in retirement. Perhaps you want to use the assets from a life insurance policy to give you access to cash after you have retired – this is another valid reason to add a life insurance policy as you near retirement. Many people’s needs change and evolve as they age, and maybe a life insurance policy you purchased at a young age has accrued cash value you would now like to withdraw. Buying another life insurance policy could allow you to access your cash value and still retain your full death benefit for your heirs with the new life insurance policy.
Transfer wealth without tax consequences. The proceeds of life insurance policies are tax-free, as you probably know. This means it is a wise way to shift some of your wealth to others – your heirs, partner, or someone else you would like to help support after your death. When you had children, you probably purchased life insurance to take care of them. But since they have grown up, you may have other heirs you want to protect now. Do you have grandchildren or great-grandchildren you would like to leave tax-free funds to? Now is the time to buy a life insurance policy to name them – or a trustee if they are minors – as the beneficiary. Do not forget you can name multiple people or entities as beneficiaries if you would like.
Final Thoughts
Take stock of your life insurance and other financial plans as you approach your retirement years. The decade before you retire is a critical time to finalize your life insurance plans. If you need to purchase another life insurance policy, now is the time. In your fifties and early sixties, you may still find competitive rates that will only continue to increase year over year if you don’t take action now.
We can help you review your current life insurance policies, your pension, and any other savings you have lined up to determine if you might need more life insurance. Call us today for help reviewing your policies and purchasing additional coverage. Purchasing additional coverage is easy with our free, no-obligation quote process.
How Do I Learn More?
To learn more about your insurance needs as you approach retirement, contact the experts at Hometown Life Insurance. Our licensed experts will be happy to answer any questions you have.
External Links:
- https://www.canada.ca/en/services/benefits/publicpensions.html
- https://www.canada.ca/en/revenue-agency/services/tax/individuals/segments/changes-your-taxes-when-you-retire-turn-65-years-old.html
- https://www.canada.ca/en/financial-consumer-agency/services/insurance/life.html#toc3
