Question: Is it fine to secure insurance after retiring?

Answer: There’s no standard answer for this question. Getting a life insurance after retirement depends on many factors. Different people, different needs, different investment accounts, and different retirement funds. What may be suitable for Valerie may or may not be appropriate for Kenny.

Let’s look into these factors one by one.

Income. If you retire and opt to spend your golden years not being employed, life insurance is not an option. The same goes for retirees who depend on their Social security and retirement savings. In case you pass away, your retirement accounts will continue to pay your family. Also, Social Security will give a survivor benefit. Payouts and benefit vary on the holder’s contribution and overall situation.

Debt. Every person wants a debt-free retirement. But that is not always the case. At least more than half of retirees still carried a mortgage in 2013, with student loan seen to be one of the main problems among retirees in the future. If you still have debts, you might need to continue your insurance. Better be safe than sorry.

Estate. In some cases, retirees may utilize life insurance strategically. It can be used to settle business debt, manage estate taxes or finance retirement plans. Consult a lawyer knowledgeable in estate planning, though. Unless you have a massive estate, don’t.

Sufficiency of Family. Insurance is out of the question if your spouse is self-sufficient, and if your children have the means to sustain themselves. However, if you have kids with special needs or if they still live with you, you may want to consider obtaining an insurance.

Generally speaking, having a life insurance is counterproductive especially if you do not incur substantial debt and earn income, and if estate planning is smooth sailing and your family can survive even without your assistance. To help you decide, approach a financial adviser, not an insurance agent. Since they are normally paid by commission, they might urge you to get a policy even when you don’t need it.