February 14, 2020
Test your retirement financial savvy and learn how life settlements can generate much-needed cash in retirement with this Retirement Planning Quiz published in Kiplinger, with guidance from Anne Long, Senior VP at Lighthouse Life.
Most view life insurance primarily as a way to protect a family from the loss of income should a breadwinner die during his or her working years. If that’s an individual’s main purpose in purchasing a policy, it’s a good one. But that income-replacement function doesn’t have to — and, in my opinion, probably shouldn’t — come to an end in retirement.
When one spouse passes away during retirement, the surviving spouse (usually the wife) often struggles financially. While some living expenses might be lower when there’s just one person in a household, the reduction in costs rarely offsets the drop in income. At a minimum, one of the two Social Security checks the couple was receiving will go away. Sometimes, a pension payment also is lost or is cut to 50% or 75% of the original amount. Life insurance can be used to ensure there is enough money to compensate for that missing income, allowing the surviving spouse to maintain his or her standard of living throughout retirement.
This article originally appeared in Kiplinger.