DENVER--Michael Snowdon, CFP, CMFC, and the CFP Program Manager at the College for Financial Planning, has a list of what once were conventional wisdoms: The earth is flat. The sun orbits the earth. Man will never fly. Smoking soothes the throat. Snowdon would like to add one more to that list:
Older people don't need life insurance.
Some people get to a point in their lives when their kids are gone and they say, 'I don't need to worry about life insurance', but most older people need at least some life insurance.
There are exceptions. If no one is financially dependent on you, and all potential liabilities are covered in the event of your death, such as funeral expenses or mortgage payments until the house is sold, then you may not need life insurance. However, even if you're beyond child-rearing and income-earning days, you may need coverage for one or more of the following reasons:
Estate settlement costs. If nothing else, people need funds to pay for the funeral and other costs associated with death. Dying is not free.
Estate taxes. Larger estates face the added potential of estate taxes, which start at 37% for estate assets over $675,000. And that figure may affect more estates than people realize. Inflation alone has pushed many estates into the estate-tax bracket. Life insurance, when it's placed in an irrevocable life insurance trust to keep it out of the estate, can provide the funds to pay for any estate-tax liability. ...
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