Planning for retirement? Here's why you should review your life insurance

Retirement is often seen as the golden era of a lifetime, a time to relax, travel and indulge in hobbies without the constraints of a 9 a.m. to 5 p.m. job.  

You've spent decades building your retirement savings, paying off debts, and ensuring your family's security. However, one often overlooked component is having life insurance for retirement.  

Here's why reviewing your life insurance policy as you near retirement is essential. 

Changing needs 

Throughout your working years, life insurance serves as a vital safety net designed to replace your income and safeguard your family from financial hardship.  

Upon retirement, your income generally shifts to savings and pensions instead of regular paychecks. As a result, the need for life insurance to cover income replacement diminishes. However, you may still wish to maintain income replacement coverage to provide your spouse or other dependents with a financial cushion. 

Reduced financial obligations 

In your younger years, life insurance plays a crucial role in safeguarding against significant debts, such as mortgages and your children's education expenses. By the time you reach retirement, you may have paid off your mortgage, eliminated student loans, and minimized other financial obligations.  

At this stage, it’s important to reassess your life insurance policy in light of your financial goals. This evaluation can help you determine whether you still require the same level of coverage or if you can opt for a reduction, potentially saving you money on premium payments. 

Legacy planning

As you transition into retirement, your focus might shift from income protection to legacy and estate planning.  

Life insurance can be pivotal in leaving a financial legacy for your loved ones, supporting charitable causes or ensuring your estate is managed according to your wishes. Updating your policy allows you to adjust beneficiaries and increase or decrease coverage, maximizing the benefits for your heirs.  

Effective estate planning can also help minimize estate taxes and ensure a smooth transfer of assets.  

Review your policy now 

Retirement marks the beginning of a new and exciting chapter in life. By evaluating your policy, you can ensure it evolves with your changing needs and aspirations.  

This careful consideration will help protect your loved ones and secure their financial future, allowing you to take full advantage of your retirement.  

Book an appointment today to speak with a CAA Protect advisor or call 1-800-709-5809. 

Questions about life insurance? To speak to a professional who can guide you to the right coverage from the right insurer at the right price call us at 1-800-709-5809 or email us at info@caaprotect.ca.