20 Reasons Not to Jettison Your Life Insurance After 60

Let’s think about this: You’ve earned the majority of what you’ll ever earn over the past 40 years. You should have accumulated enough assets to retire and live happily ever after, right?

The ups and downs of the financial markets, however, have been an eye opener about how uncertain your (or anyone’s) financial future may be.

Most people think of life insurance only when they want to protect their family and provide a source of replacement income in the event of their death. They don’t think of it as a buffer to replace lost assets due to market volatility—for example, the market goes south and you die before you have the time to rebuild or replace the lost assets.

They don’t think of life insurance as a buffer to replace lost assets due to market volatility.

Yes, I know. Your children are grown and gone. The mortgage is paid off. You have minimal debts. So, why should someone 60 or older consider purchasing permanent life insurance?

Here are some reasons for life insurance after age 60:

  1. Offset loss of retirement income to spouse at death. (Pension max)
  2. Pay costs associated with death
  3. Pay final expenses
  4. Pay estate and inheritance taxes
  5. Pay off debts
  6. Pay income in respect of a decedent taxes on IRAs, 401(k)s, etc.
  7. Provide for the care of a disabled child, spouse, etc.
  8. Offset loss of a key person in a small business
  9. Provide funds to buy out interests of a deceased business partner or co-shareholder
  10. Dividends can be a tax-free source of supplemental retirement income
  11. Cash surrender values are a source of emergency funds during life
  12. Cash surrender values can be wholly or partially annuitized to provide additional guaranteed lifetime income
  13. Any unused funds can be used to provide a gift to grandchildren
  14. Provide a gift to charity at death or prior if desired
  15. It adds flexibility to the estate plan
  16. You can balance uneven distributions of property or business interests to your children
  17. You can spend all your money and still leave a legacy for your children or grandchildren
  18. It’s creditor proof in most states
  19. It can be designed to provide an “inevitable gain,” no matter when you die
  20. It can collateralize loans. As people live longer, they tend to take on more debt or debt that has a longer amortization (just look at all the big houses being built by people who consist of a family of two post-65 adults!)

Review your personal situation. You may find there are more reasons to own life insurance after age 60 than you think.

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by Marvin H. Feldman

Marvin H. Feldman, CLU, ChFC, RFC, is president of the Feldman Financial Group in Palm Harbor, Fla., and CEO emeritus of Life Happens. He is a 41-year Million Dollar Round Table member and was the 2002 president. He is a 33-year member of the MDRT Top of the Table and a past Top of the Table chairman. He also is the recipient of the 2011 John Newton Russell award, the highest honor bestowed on an individual by the insurance industry.

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