What to Do With Your Life Insurance Policy When You Retire

Life insurance is very important when you have a family who depends on you for financial support. The policy's benefit can be used to cover funeral costs, college tuition, mortgage loans and other daily expenses.

If you have made it to retirement, life insurance shouldn't be a priority. If you do not have children who depend on you for financial support, to continue paying for life insurance isn't that necessary.

If you have term coverage, it is best to let the policy expire. You shouldn't stop paying the premiums; just wait for the expiration date. Your agent will try to convince you to buy extra coverage or renew the policy. You shouldn't rush. Take a few days and think if you really need coverage. Is your family in financial difficulties, do you want to give a college education to your nephews? But most importantly, can you afford it? If the answer to both questions is yes, then extend the policy. Otherwise, just let it expire and save your money.

In the case of a whole life insurance policy, you should allow the cash value to grow. However, the premiums can be a financial strain, but the policy's account can help you pay for your coverage. From a certain age, permanent life insurance becomes self-sustaining. The policy's dividends are not taxed. The benefit is also tax-free, which can turn out to be an efficient way of leaving an inheritance to one of your relatives.

Since you kept the policy active for a couple of years, your dividends can be enough to pay out the premiums. This means that you will get life insurance for free, allowing you to keep up a positive cash flow.

A permanent policy doesn't pay out the cash value to your beneficiaries. When you are retired, it is the perfect moment to borrow against you policy and to cash in on your savings. However, remember not to overextend yourself. Borrowing against your policy shouldn't exceed the cash value remaining. If you can't afford to continue paying the premiums and decide to cancel the policy, you will have to pay back what you have borrowed at a high interest rate.

To close, life insurance can be profitable, even during retirement, but as you age, you have to make adjustments to your policy. Do not settle all your life for the same coverage, even if you do not need it. If a policy is of no more use to you, go ahead and cancel it!

Guaranteed life insurance for over 65 years old seniors can help cover your funeral expenses and other small debts and mortgage loans. and compare the best  Retirement Insurance Policy available.

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