Keeping Your Life Insurance Is Not an ‘All-Or-Nothing’ Decision

About Life Insurance

Perhaps you bought life insurance policy years ago with the expectation of not requiring it at the time of retirement. As you start retirement, you feel that your savings are less than you expected. So, what should you do about your Life Insurance?

If, as a couple, you have enough retirement savings so if one of you dies, the other has enough to live on, and then you don’t need to rely on life insurance to supply extra ‘savings’ with its death support. Your big saving is a form of ‘self-insurance’ for both of you.

The stock market and real estate market turndowns and other unforeseen conditions may have significantly destabilized their savings.

So, you have to work longer to increase their savings. Speaking of expenses, what should you do about your life insurance as its term coverage comes to a closing stage?

Shortcomings of savings have left a need to maintain life insurance coverage. Being 10 or 15 years older than when you bought your first policy meant to significantly increased premiums to maintain the same coverage. That will further exaggerate trying to reduce on expenses.

What could you do in such a situation?

Know that maintaining life insurance coverage have to be ‘all or nothing’ decision. If you’re in such a condition, you can opt for a half-way measure that keeps you insured while not increasing your present life insurance everyday expenditure. Here’s how…

First off, you almost certainly do not need the extent of coverage you required some 10 or 20 years ago. Perhaps your children are out of college and independent and further, your savings – though less than what you had hoped for – are probably much larger than before.

Secondly, premiums may be less than you imagine. There has been a lot of competition among life insurance companies selling term insurance over the last 20 years. This, along with increasing life expectancies, has fostered more economical premium charge.

Settling for lower life insurance coverage and for a shorter term can solve your problem. Though you are older, you may be capable to maintain or even lower your current insurance expenses.

If you have gotten a cash value policy but are still paying premiums on it, you can opt for converting it to a paid-up policy of lower benefit. That way you would have some coverage and abolish any further premium payments.

So you see you probably have a way to maintain the security that an insurance policy gives you while you carry on increasing your savings for retirement.

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