Apr 19th, 2013 | By | Category: Senior Finances

Understanding Life Insurance

Life insurance isn’t a fun thing to think about, but as senior citizens or soon-to-be senior citizens, it’s something you know you should invest in to protect your family and your life’s work. A recent Forbes study found that two-thirds of life insurance policy holders admit to having a poor understanding of how different aspects of life insurance work.

SCJ recently found a resource online for seniors that helps understand life insurance.’s Guide to Life Insurance strives to educate consumers by walking them through the process of buying a policy, step by step.

Do You Need Life Insurance?

Who needs a policy? The answer isn’t “everyone,” but if you have assets and would leave a family behind, or if you still bear financial responsibilities, you most likely should consider life insurance. How do term and pure coverage policies work, and which one is best for you as are facing retirement? What are the differences in the policy you’d need at age 35 and the policy you need now? If you purchased a convertible policy, is it too late to convert it?

The Simple Dollar Guide to Life Insurance explains intricate policy details in an easy-to-understand manner. Here are some things you may not know: Once your term policy is in place, changes in health cannot affect your rates, but the older you get, the higher rates you’ll pay. And while some life insurance policies can be thought of as an investment, others are not. In addition, the time-honored formula that says to buy a policy worth four times one’s annual income doesn’t work for 35-year-old buyers, and it certainly doesn’t work for retired individuals either.

You may need to hire an insurance agent or similar financial expert if your estate planning or financial situation is especially complicated, but remember that even the best planning now can’t make up for poor planning or losses later. Life insurance cannot replace a retirement plan, though it can be a good supplement.

Experts at The Simple Dollar can answer all your life insurance questions, offering insight into planning for the best as well as the worst, and can help you turn a complex, important situation into an easier one.

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