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Is Life Insurance Needed After Retirement?

By May 5, 2016May 21st, 2020Insurance
Many believe that once you hit 65, and retire you no longer need life insurance. It’s time to debunk this myth.  Traditionally life insurance is thought to be needed when you have an income to protect, when you have kids to support, and you have a mortgage.

While having life insurance after 65 isn’t for everyone, there are very good reasons to consider it.

  1. Supplement your retirement income. If you have an existing permanent life insurance policy you may be able to tap into accumulated cash as a form of retirement income. You can then incorporate the funds in your permanent life insurance policy to compliment other forms of your retirement income like 401(k) plans, Social Security, and IRA’s.
  2. Transfer wealth. Life insurance can also be utilized to transfer wealth to your heirs while avoiding inheritance taxes. For 2015 the federal exemption for estate taxes have been raised $5.43 million, however there are still state inheritance taxes to consider. Life insurance payouts are generally free of income tax, but they are still subject to inheritance tax if they are owned by the insured. This means if you own the policy on yourself, it is considered part of your estate. 

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