Do Empty Nesters Need Life Insurance?
The big day is finally here. Your youngest child has packed up and moved out of the family home. You and your spouse are officially empty nesters.
While your children have no doubt been an important and rewarding part of your life, it’s OK to feel a little joy about your new situation. Being an empty nester often means being free in ways you may never have been in your adult life. You don’t have to schedule around your kids anymore, and you don’t have to cater to their needs.
You also may have new financial freedom. Kids are expensive. With them out of the house, you can begin the process of cutting expenses and putting that money to better use.
One expense you may be tempted to cut is your life insurance premiums. Many people buy life insurance when they become first-time parents. The insurance provides a base of protection if the parent should pass away. With the kids out of the picture, though, surely there’s no need for continued coverage.
Not so fast. While your coverage needs may have changed, they haven’t necessarily disappeared. There are many reasons you may still need coverage. Below are some of the most common reasons why empty nesters still need life insurance:
The kids aren’t fully settled.
Just because the kids have moved out doesn’t mean they won’t need your help in the future. In fact, today’s college graduates are entering a shaky labor market and a rapidly evolving economy, and they may be doing so with a mountain of student loan debt.
It’s possible your kids will need help in the future, and they may even need to move back in with you. If that’s a possibility, it may make sense to keep your coverage in place.
You have other dependents.
Your kids may not be the only ones who rely upon your income or your support. Your elderly parents may need your assistance, either now or in the future. You could be a young grandparent, and your grandchild may rely on you for help.
Even if you don’t provide financial support, you can still have dependents. If you spend a significant number of hours every week providing care for an elderly parent, that parent depends on you. They would be in a difficult situation if you passed away. They may need funds to hire a caregiver. Life insurance can help them get the care they need.
You’re not done saving for retirement.
If you pass away, you not only lose the ability to generate income, but you also lose the ability to save for retirement. You may question why one would need to continue saving for retirement if they’re dead. Obviously, you wouldn’t need retirement funds, but your spouse might.
If you’re not confident that you have enough retirement savings for your spouse to live comfortably in the event of your death, then life insurance may still be necessary. You may want to consider a short-term policy that bridges the gap between now and retirement.
You have debt.
Sometimes life insurance coverage isn’t about the kids at all. Rather, it’s about paying off your debt in the event of your passing. If you have debt that can’t be paid with the sale of assets, life insurance may still be needed. Examples would be credit card debt, past-due taxes or even debts tied to an old failed business. You don’t want to leave your spouse and children with these obligations. Use life insurance as a form of protection.
Not sure what your need is now that the kids are out of the house? We can help you determine your needs, and we can recommend the right protection strategy.
This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
15948 – 2016/8/3
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