Is life insurance over 60 really necessary? This is a more difficult question than it sounds. After all, many women have had life insurance for most of their lives.
When we are younger, we see it as a necessary measure to protect our families if something unexpected should happen to us. But, as we get a little older, many of us start to wonder whether we are just wasting our money. Now that our kids have grown up, do we really need to pay money every month for life insurance?
Since everyone’s situation is different, it is impossible to provide a blanket answer to this question. However, I hope that the following gives you some questions to raise with your family and a financial professional.
Let’s start with the basics. Life insurance is not about “putting a value on your life.” Your life is, of course, priceless. The purpose of life insurance is to provide financial resources to your dependents if you pass away and are no longer able to provide for them.
For example, when you are married with children, financial advisors commonly recommend that both partners get life insurance. This way, if one of them passes away, the other will be able to take care of the family with financial support from the life insurance policy.
For the same reason, broadly speaking, most women in their 60s do not need to buy life insurance. According to financial expert Suze Orman, it is ok to have a life insurance policy in place until you are 65, but, after that, you should be earning income from pensions and savings.
That said, there are a few situations in which having life insurance in your 60s might make sense. Let’s explore a few of them.
There are a few situations in which you might still have children who are dependent on you in your 60s. One case would be if you had your children late in life, and they are still in high-school or university. Another would be if you are raising your grandchildren because their parents are not around.
If your children are grown up, but they suffer from a mental or physical disability, you might also want to keep your life insurance. This way, you would be able to help ensure that they get the support they need if you pass away.
Some women keep their insurance policy with the hope of leaving their children some inheritance money. If you have a permanent life insurance policy, which was purchased years ago, the cash component may have grown significantly. As a result, you might feel like “sticking with it” until the end.
The only challenge here is that women in their 60s have a tendency to underestimate how long they still have to live. As a result, they may end up paying much more in premiums than they expect over the course of the rest of their lives.
According to the Social Security Administration, a woman who is 65 years old today will, on average, live to age 86.6. In addition, 25% will live past 90.
This is one of those situations where it really does help to sit down with a financial planner who can help you to crunch the numbers and decide on the best course in your situation.
There are certain situations in which it might make sense to consider life insurance due to your marital situation. For example, in some cases, a person is not eligible to receive his partner’s pension should he or she die.
If you fall into this category and your partner would have trouble supporting himself if you were to pass away, you may want to consider keeping your life insurance.
Once again, this decision comes down to a number of factors including your health, the health of your partner and his ability to support himself should something happen to you.
The decision regarding whether to keep your life insurance policy in your 60s is complicated, and you should definitely get professional support. The most important thing is to make this decision consciously.
Don’t keep your life insurance just because you have always had it. You may end up spending more on premiums than your survivors could ever hope to receive.
At the same time, don’t think that you automatically need to get rid of life insurance just because you reached your 60th birthday. Take the time to look at your personal situation and make an informed decision.
When I asked the community about the life insurance question, I expected most women to be strongly against having life insurance at our age. However, as it turns out, we’re split pretty evenly down the middle.
Equally interesting were the reasons that the women in our community gave for keeping their life insurance. While few of us see life insurance as a way to leave money for our loved ones, we all want to reduce the stress that our loved ones would feel should we pass away.
Along these lines, several women in the community said that they have decided to keep a small policy to cover their funeral expenses. As Valerie R. said, “If I don’t have insurance then my children will be stuck with the bill for burying me. So I will keep mine… just not as much.”
Another group of women said that they had purchased universal or variable life insurance policies that could be cashed in. For these women, life insurance is a kind of “forced savings account.”
Finally, there were some women who had been paying into an insurance policy for a long time and just couldn’t bring themselves to cancel. As one woman said, “I have an insurance policy so that I can give my children a final gift. I hope this will help to insulate them from the financial realities of the growing economic gap that faces hard-working people.”
Then there were the women who argued that having life insurance just isn’t necessary at our age. These women said that it’s better to spend on your priorities today than to let your head fill with “what ifs.”
Obviously, there’s no “right” or “wrong” answer here. Still, it’s fascinating to hear how our perspectives differ on this important issue. Let’s keep the conversation going!
What do you think? Do you still have a life insurance policy? Have you bought life insurance after 60? How does life insurance fit into your overall financial plan? Leave a comment and let us know.