If You’re Retired, Do You Still Need Life Insurance?

It depends, but in general people tend to be underinsured early in life and overinsured later in life. Before making any decisions, get a needs analysis.

An older woman discusses paperwork with a financial adviser.
(Image credit: Getty Images)

The idea of life insurance is unpleasant in nature. I’m going to give you, the insurance company, money every month. I know that I will never see any benefit in exchange for this premium. The only way my family gets anything is if I die while the policy is in force. As I write this, I now get why people really hate this insurance. But you know what’s worse? Seeing a family who has lost a key earner have to sell their home because they can no longer afford the payment.

There are many methodologies to quantify your life insurance need. At their core is protecting against outstanding debts, replacing human capital and paying for future goals, like college. Human capital in this context represents the present value of future earnings: If I were to buy you out of your career, what would it take?

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Evan T. Beach, CFP®, AWMA®
President, Exit 59 Advisory

After graduating from the University of Delaware and Georgetown University, I pursued a career in financial planning. At age 26, I earned my CERTIFIED FINANCIAL PLANNER™ certification.  I also hold the IRS Enrolled Agent license, which allows for a unique approach to planning that can be beneficial to retirees and those selling their businesses, who are eager to minimize lifetime taxes and maximize income.