If you don’t have a life insurance policy, or are thinking about getting a second policy to supplement your first, you may be wondering whether term or permanent insurance is a better fit after retirement. There is no single right answer, but here are a few points to consider:
- Term insurance will be cheaper. Term insurance has a temporary coverage period and no cash value accumulation, both of which make this type of policy much cheaper. If you’re budget-conscious or have health issues, term could be the right way to go.
- Permanent insurance is permanent. By the time you reach retirement, you’re not as likely to have a temporary need for extra coverage but a permanent one. Taking out a permanent policy means that you can provide the added coverage to your beneficiaries for life.
- Term insurance can be converted. If, at the end of your term, you decide you want to keep the policy longer, you may be able to convert it into a permanent policy without a new medical exam.
- Permanent policies lock in rates for life. If you convert a term policy, you’re going to be charged a higher rate. With a permanent policy in place, you never have to worry about rate increases.
- Permanent policies offer some premium relief as cash values grow. With a permanent policy accruing cash values, you can use the accumulated cash value to help offset the cost of premiums in later years.
- Permanent insurance is one of the only ways to get long-term care coverage on a life policy. If you want a hybrid policy to provide long-term care coverage, permanent is the only way to go.
Life insurance is a valuable tool no matter what your age or life stage and is a perfect way to protect your beneficiaries from any loss of assets you experience during retirement. Work with an advisor who understands both your death benefit requirements and budget concerns to find a policy that fits all your needs.
#lifeinsurance #term # permanent #coverage
Author: Dennis M. Postema
Video Production: Adam Grillot[/vc_column_text][/vc_column][/vc_row]