As you look to the next chapter of your life, you would probably laugh if someone suggested to you that not it’s too late to go back to college, take up a new career, or relive your 20s backpacking days in a far-flung location. You may feel like those days are long behind you (or you may want to dive in to a new experience—hey, have fun!) but it most likely isn’t too late for you to buy term life insurance.
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Read on for ten reasons why.
1. Term Life Insurance Protects Adult Children and Grandchildren
If you’re one of the nearly 70 million grandparents in the USA, it might not surprise you to learn that more than 60% of you spend significant amount of time and money each year supporting the needs of adult children and their families.
Even if you’re not a grandparent yet, it’s likely you’re still supporting your child in some way. In fact, nearly 75% of parents of millennials provide them with financial help, and 40% let them move back home after college (if they ever left). This might not be how you envisioned your golden years, but it’s the reality for many families.
If it’s possible that your adult children may require your continued help, your financial plan should include term life insurance that will provide for them and help protect your spouse or partner.
2. Term Life Insurance Replaces Loss of Income
For most people nearing 60, this may be your last opportunity to get a term life insurance policy that can help provide some additional financial security during a time when many are leaving their jobs or hoping to do so soon.
Let’s look at the working landscape at this age:
Although only about 19% of seniors 65 and up are still working in some capacity, nearly 60% of those who are are working full-time. Although many of the 9 million older workers are still at their jobs by choice, a significant number—35%—do so because high costs makes it impossible for them to retire and maintain a comfortable standard of living.
If you think you may be a part of this group who is working past the traditional retirement age, then you should have a term life insurance policy that will protect your loved ones from the impact of lost income when you are gone.
If you are working past the traditional retirement age, then you should have a term life insurance policy that will protect your loved ones from the impact of your lost income when you are gone.
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3. Traditional Retirement Benefits Aren’t Certainties
A retirement pension is no longer a certainty in the life of the American worker. In fact, thousands of firms have eliminated pensions altogether, and only about 13% of private sector workers are currently covered by active pension plans.
What’s more, your social security benefits might not even be available to your loved ones after you pass on. In most cases, your spouse will have to choose to receive either your social security benefits (if they are eligible for them) upon your death or their own benefits in the future.
» Learn more: Estate Planning: Not Just for the Wealthy
A term life insurance policy can replace the income that a traditional pension or social security benefits would have provided for your spouse or partner, while eliminating the need to make them choose.
4. You May Need to Protect Taxable Inherited Assets
Capital gains taxes and state inheritance taxes are just two of the variables that may impact the value of the legacy left to your loved ones, should tax laws change in the future.
While certain wealth transfer tools such as the Roth IRA may provide a buffer, your term life insurance policy will offer your family the monetary security that can help them weather future changes in federal tax laws.
If you’re curious about this particular aspect of your financial future, you can learn more about IRA options and how the best term life insurance can complement your existing retirement plans while supporting your long-term financial goals.
5. Group Life Insurance May End at Retirement
Your employer may offer life insurance as part of your benefits package, but that coverage may end when you retire.
The amount of coverage offered might also not be enough to provide for your family if you have grandchildren, take in an adult child, or help send a grandchild off to college.
While group insurance can be a valuable part of your financial security, we recommend purchasing an individual term life insurance policy that can serve as your base policy.
With your group insurance policy as a supplement, you’ll be assured that your family will still be protected after your retirement, regardless of the amount and term of your group coverage.
6. Accelerated Death Benefit Riders Offer Protection If You Become Terminally Ill
An accelerated death benefit rider allows your family to access a portion of the proceeds of your term life policy early—to use for any purpose—should you develop a terminal illness or should you need to be cared for in a nursing home.
As Baby Boomers now have the longest life expectancy rates in history—84.3 years—it is important to have a term life insurance policy that offers an accelerated death benefit rider to protect your family in the event that you become gravely ill.
7. Term Life Insurance Can Provide for Your Great-Grandchildren
Although it may be far off, as a grandparent you have the opportunity to leave your grandchildren with funds that they can set aside for their own children.
This can help them pay for college, buy a home, or start a business. That means that your legacy can reach across two generations, and it doesn’t require you to be a billionaire to do so.
8. You Can Still Support a Cause That You Believe In
Your favorite charities will likely continue to support causes close to your heart long after you are gone.
If you have altruistic intentions for your finances, you can even name a charity or other non-profit as a beneficiary for your life insurance policy. The best part is that your posthumous donation may be far more than you could have afforded if you were simply paying out-of-pocket, making a bigger impact with your legacy!
» Learn more: Using Life Insurance to Help Your Favorite Charity
9. Term Life Insurance Can Pay Off Outstanding Debt
At the end of your life, there may be bills and expenses that remain unpaid, along with assorted fees related to the transfer of your estate.
Rather than deplete your assets and leave a diminished legacy to your loved ones, your term life insurance policy can take care of your debt so that your family receives the full amount that you planned to leave them.
10. Term Life Insurance Covers End-of-Life Expenses
Burial and funeral expenses may be a significant burden for your family.
We know that’s probably the last thing that you would want for your loved ones as they are managing their grief. Term life insurance benefits can cover burial and funeral costs that may impact their finances at an already trying time in their lives.
While there are some age limits for those who want to qualify for a term life policy, the insurance advisors at Quotacy have been helping seniors and their families find policies that protect loved ones across generations.
Even if you’ve passed the perfect age to get life insurance, there are still life insurance companies that offer policies to individuals who are in their later years. You may also wish to consider guaranteed whole life insurance. This type of coverage is also known as final expense life insurance and available to individuals ages 50 to 80. It doesn’t require any medical information and it’s guaranteed acceptance.
Term life insurance is less expensive than whole life insurance, however. Start your search by reviewing some of the best term life insurance companies and then get your free quote today.
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About the writer
Director of Inbound Marketing
Kate is Director of Inbound Marketing working on business strategy, SEO, and writing for QuotacyLife. Kate's gift is explaining complex financial planning and life insurance topics in a simple and direct way to help families become more financially savvy and empower themselves to make wise choices. She works with Quotacy's underwriters to ensure the financial tips shared in her blogs are spot-on and truly helpful to anyone researching the ins and outs of life insurance online. If you would like a topic to be covered in our blog, leave Kate a comment below or connect with her on LinkedIn.