When the kids are grown and living independent lives of their own, it’s a good time to re-assess your insurance needs. Even at the “empty nest” stage, there are still many objectives life insurance can help you meet in your 50s, 60s and beyond.
To Help Others
If your parents are still alive, your spouse has health issues, or you have adult children with disabilities, life insurance can help provide for their needs in the event of your death. In addition, other heirs or even charities can serve as the beneficiaries of your life insurance benefits. This is an easy way for your executor to make good on your wishes for bequests or charitable giving without having to liquidate other assets.
Lost Retirement Savings
For as long as you and your spouse are working, you will likely enjoy salary raises, greater pension benefits and more IRA contributions. Life insurance can help compensate for the benefits of any lost income if you or your spouse should die while still employed.
Social Security Gaps
If you or your spouse should die after your children are out of high school, but before you have retired, Social Security benefit payments will not apply. The surviving spouse cannot claim them until he or she reaches the age of 60 and applies for the deceased spouse’s benefits. If the survivor begins receiving these benefits before the full benefit age (66 or 67, depending on the survivor’s birth date), the benefit is permanently reduced. Having a life insurance policy on both spouses can help avoid the effect of this coverage gap.
Even after you and your spouse have retired and started to receive Social Security, insurance can help offset Social Security imbalances. At retirement, the spouse with the larger pre-retirement income will receive benefits based on that income while the spouse with the smaller income receives benefits based on his or her income or half of the spouse’s, whichever is larger. If either spouse dies, the larger benefit continues, but the second one stops, which can cause a significant reduction in income.
As life expectancy has increased, so has the need for long-term care. A home health aide can cost as much as $50,000 a year, while the annual cost of assisted living can top $100,000. However, there are ways to pay for long-term care through a life insurance policy. Hybrid permanent insurance policies like Navy Mutual’s Flagship Whole Life can provide access to your full death benefit while you are still alive to handle the costs of chronic illness or long term care. You can also sell your insurance policy through a life settlement, surrender a permanent policy for its cash or surrender value, or take a loan from the cash accumulated in a permanent policy. These options can have various tax implications, so be sure to talk with an advisor before making a decision.
To talk to a Navy Mutual representative about your insurance needs at any time in life, call 1-800-628-6011.