Why you might want to keep your life insurance in retirement

Rick Goree - One of my trusted
insurance advisors in my home
town of Paso Robles, Ca

Most people think they don't need life insurance in their retirement, but there are some good reasons you may want to keep it.

Life insurance helps protect your spouse and children from poverty in the case of your untimely death. However, once your children become self-sufficient and you and your spouse accumulate significant assets, there's less of a need to keep paying the premiums for life insurance. Here's how to tell if you still need life insurance in retirement:

Are you still working? 

Many Americans continue to work during the traditional retirement years. Life insurance can protect your family from the loss of your income when you die. "Whether life insurance makes sense or not for retirees depends on how much earned income would be lost due to the death of the retiree," says Hanming Fang, an economics professor at the University of Pennsylvania. "If the retiree does not have any earned income, then there is no real need for life insurance. If the retiree's death may lead to significant loss of income, then there may still be a need for life insurance even in retirement."

Are your children and spouse self-sufficient? 

When you have a young family, life insurance can provide an incredible amount of security. But the needs of your family will change over time. "One thing you want to think about is what would happen if you were no longer here," says Joel Lange, investment director of Bell Wealth Management in Austin, Texas. "If you are not responsible for anyone else and you have sufficient assets to cover your bills, then there is very little need to continue to hold life insurance in retirement."

Will you need to pay estate taxes? 

Life insurance can sometimes be an estate planning tool. "If you have a farm that you want to keep in the family or if you are a business owner and you don't have enough liquid assets to take care of estate taxes, you can have a life insurance policy that is tied to your estate plan," Lange says. It's a good idea to talk to an estate planning expert before taking on a life insurance policy for tax purposes. "Instead of going to an agent who has a stake in your keeping the insurance, go to a fee-only planner or tax attorney who doesn't have a stake in it," says Robert Hunter, director of insurance for the Consumer Federation of America.

Who should I talk to for advice?

Here is a list of my recommended insurance agents in San Luis Obispo County, whether you are looking for life, home, or auto insurance:

HFG Coastal Insurance Services, Inc.
Paso Robles Life Insurance Agency
1446 Spring Street, Suite 205
Paso Robles, CA 93446
(805) 239-7443

Rick Goree – State Farm Insurance Agent
Paso Robles Insurance
1947 Spring Street
Paso Robles, CA 93446
(805) 227-1560

Steve Weber – State Farm Insurance Agent
Auto Insurance Paso Robles
526 Spring Street
Paso Robles, CA 93446
(805) 238-6200

Callie L Fisher Insurance Services, Inc
Health insurance specialist in Paso Robles
578 Spring Street
Paso Robles, CA 93446
(805) 238-6593

Susan Polk Insurance Agency, Inc.
Health insurance specialist in San Luis Obispo
1443 Marsh Street
San Luis Obispo, CA 93401
(805) 544-6454

Susan Rodriguez – State Farm Insurance Agent
Life home and auto insurance in San Luis Obispo
1317 Broad Street
San Luis Obispo, CA 93401
(805) 783-7050