The kids are gone and you’re officially an empty-nester, so it’s a great time to get rid of your life insurance, right?
Not so fast. Life changes happen and it’s usually a good time to take a look at your coverage. Here are 9 reasons you may want to keep the life insurance you have or look into an appropriate policy.
9 Reasons to Keep Your Life Insurance
1. Your kids are still in college.
You may be helping them financially, with tuition or room and board—or both…or you may just be the “landing pad” for the summers. Either way, your kids are still relying on you to “be there” for them.
2. Your kids are on their own financially now, but for how long?
Many parents of grown children still offer financial support those children (or grandchildren) at some point. A tough job market or even a divorce may send them to you for financial support. And keep in mind that more Millennials (age 18-34) are more likely to live with their parents.1
3. You have debt.
The mortgage isn’t quite paid off yet; you may have car loans, credit cards, or other kinds of debt. You wouldn’t want to leave your spouse or partner on the hook for that debt, especially if you’re the breadwinner.
4. You’re still saving for retirement.
You may still be catching up on retirement savings that was depleted during the Great Recession, or your retirement dreams may hinge on what you’ll be saving from now until your retirement. Not having a contingency plan could leave your partner struggling in retirement if something happened to you.
5. You want your funeral expenses taken care of.
The average funeral and burial is estimated at around $8,000.2 Coming up with that kind of cash or potentially charging a sum like that at a time of grief is the last thing you’d want for your loved ones.
6. You want to give your grandchildren a head start.
They may still be a glimmer in your children’s eye, but you may want to help your grandchildren with college expenses or perhaps down payment for a house.
7. You want to leave a legacy for your children.
While most people don’t want to spoil their grown children, many do want to ensure that their children have a good financial cushion in the future.
8. You want to leave a legacy for a charity or cause that’s close to your heart.
Whether it’s an animal rescue center, your alma mater, or your church, leaving money to continue to support the work they do is important to many people.
9. You want to make sure your money goes to your loved ones, not taxes and fees.
If you have a sizable estate, estate taxes can eat up more than you’d like. Plus, you want to make sure there’s enough left for your family to continue living in the lifestyle they’ve been accustomed to.*
These reasons run the gamut from straightforward to complex, and so we may need different amounts and kinds of life insurance. If you’re concerned about having more coverage for a certain number of years, say until your last child finishes college or you just want to remain covered until you reach retirement, then a term life insurance policy may be just the thing. If you’d like to leave a legacy or do estate planning, then a permanent life insurance policy may be a better fit.
We’re Here for You
Don’t worry if you’re not sure how to figure all that out. A life insurance specialist can sit down with you to walk you through your needs, and then determine the right type of life insurance that can fit in your budget.
*AAA Life and its agents do not provide legal, tax or financial advice. Please consult your professional advisor prior to the purchase of any policy.
1 “For First Time in Modern Era, Living With Parents Edges Out Other Living Arrangements for 18- to 34-year-olds,” Pew Research Center, 2016
2 “Trends in Funeral Service” National Funeral Directors Association, 2015