You’ve retired from your job and are collecting your pension and perhaps Social Security. Why would you need life insurance at this stage of life?

With people living healthy and active lives longer, circumstances under which someone should have life insurance coverage have expanded accordingly. Read on for five reasons you should consider purchasing life insurance even though you are retired.

1. You Still Have a Mortgage

The housing market has had significant ups and downs over the last twenty years, and it is entirely possible that even though you are retired, you are still paying a mortgage for some reason, including the following:

• You refinanced your home to pay off debt;
• You took out a second mortgage or HELOC to pay for home maintenance and repair;
• You purchased a second home;
• You cosigned a mortgage for a family member.

If there is a mortgage still outstanding, you should consider insuring yourself in the amount of the balance or close thereto. That way, if something happens to you, your spouse will be able to stay in the home, or your home will pass free of debt to your estate and your heirs.

2. You are Supporting an Aging Parent

Many boomers are taking care of or supporting their parents who are in their eighties or nineties. If something should happen to you, what happens to them?

An insurance agent will consult actuarial tables and help you determine how much coverage you need, based on your parents’ needs and their life expectancy.

3. You are the Primary Breadwinner

If you are married and are the primary breadwinner, chances are you have a larger pension and Social Security payment than your spouse. Again, your insurance agent will help you calculate how much your spouse will need should something happen to you, considering both life expectancy and an increase in Social Security your spouse might realize when you pass.

4.You Have Young Children

You might be surprised to find out how many retirees have young children from a second or third marriage later in life. If you are one of these retired parents, you should take into consideration your children’s current lifestyle, their ages, and whether they intend to go to college when calculating how much life insurance coverage you need.

To ensure your children are provided for, you can name your spouse as the primary beneficiary of the policy, and an insurance trust as the contingent beneficiary should your spouse be unavailable.

5. You Have a Special Needs Child

A special needs child will require care no matter how old. Again, using actuarial tables, an insurance agent will calculate that child’s life expectancy, which you can use to multiply the costs of the child’s care to determine coverage.

A minor child cannot be a beneficiary of a life insurance policy, so if you name him or her, know that a judge will decide who will manage those funds on their behalf. Wouldn’t you rather make that decision yourself?

Regardless of the age of your special needs child, do not name that child as the beneficiary of your insurance policy if he or she is not competent to manage their own finances. Instead, create an insurance trust and name a trusted friend or family member as trustee to manage the funds in your child’s best interests.

About the Author

Veronica Baxter is a writer at assignyourwriter.co.uk and legal assistant living and working in the great city of Philadelphia. She frequently works with Chad Boonswang, Esq., a life insurance attorney.

Image: CC BY-SA 3.0, Alpha Stock Images - http://alphastockimages.com/