As we age, many things change. One of the things that changes is how we prioritize our finances. Savings and expenses of your younger years or when children were at home may not be the same as today. Today, you are spending the retirement you worked so hard to build. Your life has changed. Have you reevaluated your life insurance?
Even in your leisure years, life insurance can be an important addition to your financial armor. As your children get older, or when you downsize your home, you may feel that life insurance is not as important as it once was. However, it is a resource that can pay off a mortgage, finish paying for your child’s college tuition or cover your funeral expenses.
This kind of life insurance provides coverage for the rest of your life. Because the premiums do not change, this insurance can be incorporated into your long-term budget. However, whole life insurance policies can be complicated, and often the premiums are high while the death benefit is low. For seniors, whole life insurance is not always the best choice.
Term life offers the most coverage usually for the lowest price, depending on your health. Coverage is for a specific number of years (usually ten to thirty years in five-year increments). The premiums are the same every year, which is good. You have to keep a close eye on the policy, though, to make sure it does not expire before your need for insurance ends.
Universal life insurance is a kind of flexible permanent life insurance offering the low-cost protection of term life insurance as well as a savings element (like whole life insurance), which is invested to provide a cash value build-up. It can end at the age of your choosing or when you die. In this way, it is again similar to whole life insurance. The premiums are the same each year.
Annually Renewable Term
This is a type of term insurance that has an increasing premium each year. If you only need term insurance for two to four years, this can be a less expensive option.
Burial insurance has a small death benefit, usually between five and twenty-five thousand dollars meant to be used for burial. These plans can be good for those with serious health problems because there is not much medical underwriting.
In addition to these are products such as pre-need assurances and endowments.
The next question is, then, which is the best choice for you? Every person’s situation is unique. Working with a trusted financial advisor can ensure you have the right life insurance. Remember, you need to make sure you don’t have any gaps in your financial armor.
Linden Oak Wealth Partners offers fee-only financial advising customized for women, in particular, women in transition. Our goal is to create an environment where financial planning is efficient, simplified and easy to understand. We want clients to feel empowered and engaged every step of the way. Please contact us to schedule an initial consultation today.
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