What happens when seniors don’t have life insurance?

If you have people in your life who are financially dependent on you, it may be a good idea to get life insurance. But what happens if you’re nearing or reaching retirement age and don’t have a policy?

As you get older, you may think you don’t need life insurance because you and your spouse will have different types of income. However, not having life insurance can put your loved ones in some trouble.

Advantages of life insurance for seniors

There are many types of income you and your spouse can access in your senior years, including Social Security benefits or withdrawals from savings you’ve built over the years. However, Social Security only pays limited benefits. Today the average beneficiary receives $1,907 per month.

Social Security survivor benefit rules state that if you die, your surviving spouse is entitled to the full monthly benefit you received while you were alive. The benefits may be enough to cover everyday expenses. But what about something bigger?

Let’s say you don’t have a lot of retirement savings and your survivor benefits through Social Security aren’t enough for your spouse to cover your funeral costs. If you pay life insurance to your spouse, the money can cover other major expenses you may incur, such as funeral costs and home or car repairs. Additionally, the money earned from life insurance benefits may provide the surviving spouse with more headroom.

Let’s say you’ve passed away, but your spouse has outlived you by a few years and needs to cover the costs of maintaining the home and paying off the mortgage during that time. Leaving a lump sum to your spouse can reduce your financial burden.

Also consider that life insurance benefits are generally tax-exempt. Your surviving spouse may not have other non-taxable income.

Social Security benefits include: Potential Although it is hoped to be tax-free, it is often taxable if the beneficiary is able to earn additional income, even if it is only a small amount. And traditional IRA or 401(k) withdrawals are also taxed. So this may leave your spouse with some income that the IRS can’t touch.

Additionally, although much of this discussion has centered around the surviving spouse, there may be other people in your life who you want or want to support financially, such as grown children or grandchildren. Let’s say it’s important to you to help fund your grandchildren’s college education. Having life insurance money left over can help you achieve that goal even if you’re not around.

Can seniors also sign up for life insurance?

The quick answer is yes, you can. However, costs may be higher for younger applicants.

Let’s assume that a 30-year-old and a 70-year-old subscribe to a 10-year life insurance policy. If you are over 70 years old, the insurance premium is likely to be higher because the insurance company is more likely to have to pay a death benefit. As an older applicant, it’s a good idea to compare rates and, ideally, shop around for life insurance to save some money.

Progressive also says seniors may be limited in the types of coverage they can receive. For example, 30-year term life insurance may not be available to older applicants.

But everyone said is You can get life insurance even when you’re older. So before you write down your idea, think about the benefits it could provide to your loved one.

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