If you are nearing the retirement stage of life how much life insurance do you need? This is the question that many seniors ask themselves. You probably have heard horror stories about people who canceled their life insurance and died shortly after. They left a huge debt for the family and no income to support dependents. They were simply trying to save money and did not expect to die so soon.
How do we know how much to have and when should we cancel our coverage? Frankly, it depends on your personal situation, both financially and your overall health. On a personal level, the writer has been evaluating their needs for the last few years. They have been decreasing the amount of coverage as they age and the need decreases. It basically comes down to how much debt you have, the income needed by dependents after you are gone, and your savings.
Nearing retired stage of life how much life insurance do you need?
If you are nearing retirement or are retired, add up your total debt and determine how your estate would pay for this debt. Sell the house, disperse your savings, etc. If you have enough to pay off your debt and you have no dependents then you probably have no need for life insurance.
On the other hand, you do not want to have your dependents left destitute. They should not be forced to sell the home and lose all of their family savings. Have sufficient life insurance to cover the debt that you owe. Also providing income as well might be the right answer. A life insurance salesperson can help you with deciding the correct amount.
By the time you have retired, your debt levels should be relatively low or zero. Pension income should be sufficient to support any dependents that you may have.