When professionals first enter the workforce and do not have dependents or real assets, life insurance is often overlooked. When those professionals accumulate more debt, start a family and acquire larger assets, they then tend to seek out the valuable insurance coverage that can protect family members in the event of a death. Once dependents have grown up and the policyholders enter into retirement, there may be more assets and less debt, but there could also still be a need for life insurance.
Investopedia reported that while it may seem extraneous, there are circumstances that could prove life insurance beneficial even when purchased in retirement. While no longer working, consumers may often have lingering debt or not enough pension entitlements to leave surviving loved ones with funds to live comfortably.
In addition, the news source reported life insurance can be used to ensure beneficiaries have enough money to pay the final income tax bill and any transfer or estate taxes associated with the inherited assets. Life insurance can prevent beneficiaries from being forced to sell the property to cover these costs.
The Associated Press recently reported that buying a life insurance policy can be seen as an investment as the policies accumulate cash value over time. Paying monthly premiums forces policyholders to set money aside in a savings-type fund for future use. These payments can go towards college funds or other savings once the policy is cashed in.