Do I need whole life insurance?
All children are grown, no mortgage, no loans, enough money put away for retirement.
Answers | 5
Where permanent life insurance could play a role in your financial planning is if you have a desire to pass on money to heirs or causes beyond remaining assets, or have a concern about the impact of estate & inheritance taxes on reducing what you leave to those people & causes important to you. Keep in mind that while the federal estate tax exemption has risen substantially over the years, the states have not followed suit & can still extract a significant haircut.
Another consideration could come into play if you have a pension coming. In some cases taking the pension on just your life and then providing a life insurance payout to the surviving spouse or partner could increase your retirement income at essentially no net cost. Of course this is highly dependent on age & health so it's not for everyone.
Yet another consideration has to do with protecting your retirement nest egg. One of the biggest threats to our retirement savings is the need for custodial care, either in home, in an assisted living facility, or in a skilled nursing home. The cost for this can be significant and often puts a severe financial strain on the family having to deal this. Especially true if there's a healthy spouse or partner relying on that nest egg for retirement income.
There are new life insurance products on the market which can provide help to address this issue. They don't make sense for everyone, but certainly can provide critical protection in certain situations.
Hope this gives you a flavor for the considerations Scott. Congrats on putting yourself in such a strong financial position!
Such a policy can protect your estate from stock market losses, and at the same time provide a competitive yield on premiums paid without exposing the gains to income taxes. By squirreling away unneeded deposits in Whole Life insurance, thus reducing reportable earnings, one can also reduce the likelihood of income taxes on Social Security income.
But it's impossible to know without a getting an idea of your current and future financial needs.