Thanks to Aaron Crowe at Insurancequotes.com for the interview for his article on the important topic of Life Insurance and Senior Citizens. Senior Citizens are too often taken advantage of by financial service providers and Aaron raises great points on this. Insurance Literacy is a lifelong process.
The full article titled: When do senior citizens not need life insurance? by Aaron Crowe can be read by clicking on the article name.
Article excerpt including my comments are below: For retirees who no longer work, having life insurance that was meant to replace their income if they died can be a waste of money. If they don’t have a salary to replace, the reasoning goes, why keep hanging on to your life insurance?
“Life insurance is very attractive emotionally,” says Tony Steuer, a life insurance author and consultant in Alameda, Calif. Estate planning seminars geared toward selling insurance play on those emotions, even when a senior with a good retirement plan may not need life insurance, he says. However, there are situations when seniors should have life insurance, experts say. One of the top reasons: Life insurance death benefits generally are tax-free, while payouts from retirement plans are taxable. “People start looking at the tax benefits, and that’s where the insurance companies are pushing,” Steuer says. The article cites six reasons when seniors do not need life insurance: 1) The funeral is covered (already paid for); 2) You’ve got assets put aside of $50,000 to $100,000; 3) the kids are gone; 4) You live alone or are very old (outlived everyone); 5) The cash value and death benefit of a policy are almost equal or 6) You have Long Term Care Insurance – final quote: f you’re planning to tap your life insurance to pay for your care in your golden years, that may be the wrong approach. “The problem is you’re paying for life insurance costs when what you really need is long-term care insurance,” Steuer says. Long-term care insurance goes beyond health insurance in paying for assistance with basic daily activities, such as dressing, bathing and cooking.
Let me know what you think.
Tony Steuer, CLU
California Life and Disability Insurance Analyst
Author: Questions and Answers on Life Insurance
