So who needs life insurance in retirement? They generally fall into three categories. The first is someone who doesn’t have enough assets to cover their final expenses (like funeral costs) and wants a small policy to cover these expenses so they don’t burden their family. The second is someone who has a dependent that won’t have enough income to live on after they pass away. For example, some people decide to choose a higher “life only” payout on their pension, which leaves nothing to their spouse after they pass away, and then use the extra pension income to pay for a life insurance policy instead. This is called “pension maximization” and can be beneficial if the person is in really good health and can get a relatively low cost policy. The final scenario is someone who has a taxable estate (currently one worth over $5 million) and wants to use a life insurance policy to pay the estate tax. This is particularly useful if they don’t want their heirs to have to make taxable retirement account withdrawals or sell a business or a piece of real estate in order to make those tax payments. Needless to say, this is a very small percentage of the population. Michael W. Ring Insurance: 207-478-1269.
Posted on: Wed, 17 Dec 2014 06:25:40 +0000
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