How Life Insurance Policies Change or Remain Relevant After Retirement and What Seniors Should Consider

Life insurance plays a key role in providing financial protection for your loved ones and can be part of a well-rounded financial plan. Whether you’ve obtained coverage through your employer or purchased a policy on your own, it’s essential to revisit your life insurance strategy as you approach retirement. Your financial needs and goals may have shifted, and now is a good time to assess whether your current coverage still aligns with your plans or if it might be wise to consider changes.

Understanding the Value of Your Policy

Life insurance policies don’t automatically change when you retire, but their role in your financial life often does.

If you have a term life policy, it may be nearing its expiration date around the time you retire. These policies are designed to provide coverage for a set number of years, often aligning with your working life. Once the term ends, the policy usually expires unless it’s renewed or converted to a permanent policy, often at a higher cost.

Permanent life insurance, such as whole or universal life, continues as long as premiums are paid. These policies may accumulate cash value over time, which can be accessed during retirement for supplemental income, emergencies or other needs. However, using the cash value can reduce the death benefit, so weighing the trade-offs is important.

Key Considerations for Seniors

Seniors should consider several factors when evaluating their policies, such as the following:

• Current financial obligations—Do you still have a mortgage or other debts?

• Dependents—Will anyone suffer financially from your absence?

• Estate planning goals—Do you want to leave a legacy or cover estate taxes?

• Policy performance—Is your permanent policy still growing, or is it costing more than it’s worth?

Take the Next Step

Reviewing your coverage with an insurance representative may help you confirm if it still aligns with your retirement goals. Contact Fitzwilliam Insurance Services LLC today to learn more.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.