When an individual reaches retirement age it is everyone’s hope that they have enough in their funds, assets, pensions, ect. to allow them to live a comfortable life for their later years. For this purpose insurance comes in handy. For those that have accumulated enough wealth during their working years, besides homeowners, car and health insurance, additional policies should not be that much of a concern. For the average Joe, however, life insurance is important to consider, especially if you still have an income or a surviving spouse that is dependent on your pension, which is cut in half upon your death. For this purpose you may want to consider having enough life insurance that would not only pay for your funeral expenses, but also make up the difference in the lost pension; it would supplement the lost income.

There are also other benefits to having life insurance, especially if you have a cash value life insurance policy (including whole life, universal life, variable life, etc.) With a cash value policy you can take money out in order to pay off debts at retirement, taking the burden away from your beneficiaries. Also, you can take a small portion out every month, like an income, to help pay for your bills. Another alternative would be taking out a loan against your cash value insurance, of course this would be a last alternative in my opinion, as it would add additional stress/complications to your beneficiaries.

When looking into life insurance it is important to know which one is the most beneficial for you. In order to do this consider how long you will have the policy for. The rule of thumb is if you are planning on keeping the policy for less than 10 years, go with term, but if you are willing/able to pay into the policy for more than 20 years, you should go with whole life insurance. In following this advice you will get a better return.

Term insurance is cheaper in the short run, and can have fixed premiums from 5-30 years. After the term expires, however, then you must extend your coverage, and your premium will usually increase at that time, and continue to go up as the individual gets older and older. If the insured dies during the term the money will go to the beneficiary. Also, if the term expires and you wish to cancel your policy, you will be unable to get the money back that you have paid into the policy. This is why it is considered insurance and not an investment.

Whole life insurance can be a bit more confusing. This insurance is paid into throughout the whole life of the insured, but usually has higher premiums in the beginning than term insurance. There are many different forms of this insurance, and it is important to note that most of them will allow you to get your money back if the premium has been overpaid. Also, if the insured is financially stable, they are able to invest into the market with some of the money from their overpaid premium. It is important to look into the many different types of whole life insurance before determining whether or not this route is for you.