I just read an article about this very topic (I'm Retired - Do I Still Need Life Insurance? ) and it brought up a question I will be thinking about - How much income will the surviving spouse lose if the other dies? In case of the decision as to whether or not to continue my term life insurance, right now my husband would not lose any income. Once I start collecting SS and other retirement income he would lose the SS income only if I died. We need to talk about whether or not he would need to replace that income. More thought required here.
Situations Where Life Insurance Is Needed
- Couples in their peak earning years, saving for retirement.
- Retirees who will lose a substantial portion of the family income when one spouse dies.
- Parents with non adult children.
- Families with a large, illiquid estate, who’s estate will be subject to estate tax.
- Business owners, business partners, and key employees employed by small businesses.
All true. But in addition, my understanding is that life insurance is not part of your estate, does not go thru probate and is exempt from estate tax. So it's a good way to leave money not only to your spouse, but to your heirs. However, the feds. only tax estates over $5 million. I'm a few cents short of that, so I'm not gonna worry too much.
ReplyDeleteBut I know there are a hundred other issues involved in end-of-life costs, and in the rules and regs of inheritance. So ... why do they have to make it so complicated?!?
Ha ha - I don't have to worry about estate taxes under the current rules either. By the way, I don't think money in retirement accounts goes through probate either. State laws vary too.
Delete