To Be, or Not To Be Covered: Life Insurance In Retirement

The usual consensus is that your clients who are close to retirement (or are already retired) don’t need to purchase life insurance. However, we know that insurance is not a one-size-fits-all scenario. Although clients see retirement as the financial end-game, there are still certain exceptions where having a life insurance policy through retirement makes sense:

1. Poor Health - Fidelity Investments estimates that a 65-year-old couple who retired in 2016 would need $260,000 of their own savings to handle 20 years of out-of-pocket retirement health costs. If clients are going into retirement and they believe they’ll have health issues arise in that time, a term policy with living benefits can help pay for health expenses later on.

2. Longevity - According to data collected by the Social Security Administration, about one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95. With numbers like that, it certainly adds value to the argument that a diverse portfolio that includes cash value life insurance could be a good option for some folks.

3. Long Term Care - Based on a report from AARP, the lifetime probability of becoming disabled in at least two activities of daily living or of being cognitively impaired is 68% for people age 65 and older. By purchasing a hybrid life product with long term care options included, clients can safeguard themselves from the bulk of costly LTC fees in their retirement age.