St. Charles County Journal (MO) January 5, 2020
If you
or someone you care about is among America's estimated 75 million baby boomers,
there are a few financial facts and figures you should know.
For one
thing, middle-income boomers are carrying more debt into retirement than ever
before. So, what happens to financial obligations after death? Life insurance
not only helps provide your surviving family members an income after you pass
away, but can also be used to pay off debts.
According
to a recent study commissioned by Bankers Life Center for a Secure Retirement,
middle-income boomers have lowered their overall expectation for financial
independence in retirement since the onset of the financial crisis in 2007.
Ten
years later, fewer boomers expect they will retire debt free (34 percent today,
down from 45 percent before the crisis) and fewer have paid off their mortgages
(19 percent, down from 25 percent).
If you
have enough assets to cover your debt when you pass away, creditors will
receive their due from your estate. However, it matters whether your home is
your primary asset and whether your spouse or another family member is a co-applicant
or co-signer on an account. Your mortgage and other debts, such as credit card
bills or car loans, could fall to them.
Proceeds
from life insurance can be used to pay down your mortgage and debts, as well as
help pay for funerals and other final expenses.
"Carrying
debt in your retirement years is very common today and life insurance can help
provide peace of mind that your family's comfort and security are provided
for," explained Scott Goldberg, president of Bankers Life. "Boomers
should do a complete inventory of their finances and debt, weigh their options
and find a life insurance policy that will help ease any potential financial
burdens upon death."
Here
are four tips to help you figure out whether purchasing life insurance is right
for you:
1.
Determine your need. Does someone depend on you financially? Are you lacking
the funds to cover your final expenses? If yes, consider life insurance to help
protect your family's future. A beneficiary can use the money for living
expenses or to pay off debts.
2.
Understand the different types of life insurance. There are three major types
of life insurance coverage: term life, whole life and universal life. All three
types pay a death benefit, but each can differ in terms of coverage length,
premium flexibility, cash value accumulation and distribution and other
factors.
3.
Decide how much life insurance you need. How much coverage would your family
need if something happened to you? What expenses need to be covered or debts paid
off? How much is set aside for savings? The answers will help you determine the
type and amount of life insurance you'll need.
4.
Consider seeking professional guidance. Options are available for nearly any
income and asset level, age and risk tolerance. An insurance professional can
help you evaluate your life insurance options and costs based on your needs and
circumstances.
Visit BankersLife.com/TopTips5 to
download a free booklet on Top Tips for Retirees including Reducing Debt in
Retirement, Medicare Enrollment, Managing Your Prescription Drug Costs and
more.
No comments:
Post a Comment