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Why Empty Nesters Need Life Insurance More than Ever
December 3, 2014
When your children leave the nest and go off to college, they aren’t the only ones entering a new stage of life. As a parent, you too are redefining your independence. You’re in a cycle of downsizing; fewer people in the house means fewer responsibilities and lower grocery and utility bills. Hooray!
So why on earth would we suggest that you increase your monthly financial obligations and buy more life insurance at this time?
We know it sounds crazy. But hear us out, because in today’s post, we are going to show you why paying out a little extra money now will fiscally reward you (and your family) in the future.
“Life insurance is only valuable if I have dependents.” This is a common misconception that a lot of people have. The awesome fact is that it doesn’t matter if your kids live at home or if they’re on their own, you can choose a policy that is jam-packed with benefits.
1) Provides long-term care security: As you grow older there is a possibility that when you reach a certain age you’ll need help caring for yourself, such as a private care facility or a visiting nurse. Assisted living care costs can add up—quickly. The average nursing home in the Midwest can cost $60,000 per year. These fees can place a serious burden on your loved ones. And, according to a study from EBRI (Employee Benefit Research Institute), the compounded risk of running out of money during retirement is between 100 and 800% (depending on the preretirement income and long-term care expenses). But life insurance can squelch these worries, so they never materialize into reality. Plus, as an added bonus, you won’t be taxed on most of the benefits on a qualified long-term care policy.
2) Great for supplementing your spouse’s pension: When you retire, you may think, “Goodbye life insurance. Hello, pension payouts.” But before you pull the plug on your policy, consider this: if you were to pass away, the checks your spouse receives could be significantly smaller or could be eliminated altogether. This could place a heavy amount of stress on him or her, forcing them to move and reduce their quality of life.
3) Leave a legacy for your children: We mentioned in a previous post that just because your child leaves the nest, it doesn’t mean that he or she won’t boomerang back home in the future. In the aftermath of the 2008 economic recession, many adult children moved back home after college in droves. Wouldn’t it be nice to know that you could leave your children some money to help them get off their feet and make a fresh start?
Adding to your bills after your children have left home seems counterintuitive, but the right insurance policy can offer financial stability and peace of mind.