Life insurance can still play an important role in your financial plan as an empty nester. Here’s why.
Protecting your home
Many empty nesters still have a mortgage. If something happens to you, your life insurance could help your spouse or family pay off the remaining balance. This could also help ensure your loved ones can stay in the home and potentially ease their financial stress.
Even if your mortgage is close to being paid off, having coverage could help provide the necessary funds for things like property taxes, maintenance, or unexpected repairs. Keeping the home financially secure could be a comforting legacy for your family.
Supporting your spouse
If you’re married, your spouse may rely on your income or savings to maintain their lifestyle. Life insurance could provide the funds needed to cover living expenses, pay off debts, or fund future goals like travel or retirement.
For example, if your retirement accounts are not yet fully funded, life insurance could fill that gap. Additionally, it could help support your spouse with healthcare costs or unexpected emergencies that may arise in the future. This type of coverage could provide support so your partner can maintain financial independence.
End-of-life expenses
Funeral costs and other end-of-life expenses can add up quickly, depending on the services chosen. Life insurance could help your family cover these costs during a difficult time.
It could also help them avoid having to dip into their own savings paying out-of-pocket expenses or take on debt to cover the costs. Beyond funeral expenses, these policies could also help cover medical bills, probate fees, and other administrative costs that come with settling an estate.
Leaving a legacy
Life insurance could also be a way to leave something behind for your loved ones. Whether it’s for your children, grandchildren, or a cause you care about, it’s a thoughtful way to provide lasting support.
For instance, you could use a policy to help fund your children or grandchildren’s education, contribute to a family business, or donate to a charity close to your heart. This could help support your values and priorities to make an impact even after you’re gone.
Explore your options
As an empty nester, you have different life insurance options to consider:
Term life insurance: This type of policy offers coverage for a set period, such as 10, 20, or 30 years. It could be more affordable and could also provide coverage while you’re still paying off a mortgage or other debts. Term insurance is a good choice if you want straightforward temporary protection, that could also potentially be converted to permanent life insurance at the end of the term.
For example, Sarah and John, both in their 50s, still have 15 years left on their mortgage. They did an online quote with Canada Life My Term that allows you to select the exact number of years you want covered (between 5-50). They purchase a 20-year term life insurance policy to ensure that if one of them passes away, the remaining mortgage payments and other household expenses are covered. This gives added confidence while they work toward financial independence.
Permanent life insurance: Permanent policies could provide coverage for your entire life. They also include a cash value component that can grow over time, which you can borrow against or use as supplemental income in retirement. This type of policy is ideal if you want lifelong coverage and an additional savings component for long-term financial planning.
For example, Linda, 60, wants to help ensure her family’s financial security while also planning for her own retirement. She purchases a permanent life insurance policy which can build cash value over time that she can access during her life, with certain tax implications. At 70, she’s able to borrow from the cash value to help cover unexpected medical expenses, all while maintaining a death benefit for her loved ones.
Reviewing your policy with an advisor could help make sure your coverage aligns with your current goals as an empty nester and avoids overpaying for unnecessary coverage. It’s also a chance to explore whether converting an existing term policy into a permanent one makes sense for your situation.