LIFE LETTER MATURE
Life insurance for seniors?
Many people mistakenly believe that they don't need life insurance after they retire or after a certain age. It can be a very costly mistake to ignore this important estate planning tool.
Debts - More and more Canadians are carrying debt, often significant amounts, into their retirement. Many are re-financing their homes or using lines of credit to finance their retirement lifestyle. It makes sense to have adequate life insurance in force to take care of these obligations. After all, a persons debts shouldn't last longer than they do.
Income - Along with the need to service debt, many seniors are continuing to work, perhaps not full-time, in their retirement. Some do so for the social aspects, some do so for the income, and some for both. If someone you care about is relying on your income now, life insurance can be an economical way to make sure it can continue.
Travel Expenses - Ken had moved across the country and made a life for himself. When his mother died, she did not have any life insurance or money. The settling of her estate became Ken's responsibility and he ended up incurring quite a bit of debt traveling to a distant province to deal with her affairs. Do you really want to stick a loved one with these kinds of expenses?
Equal Treatment - Many business or farm owners want their operations to continue andbig often involve one or more of their children. If there are others that aren't involved, they may be left out if the company or farm is left to their siblings. Also, a spouse may become dependent on her children if she needs to rely on income from the business for her needs. Life insurance can be used to make sure the children who would continue the business have enough money to buy it from the estate, and then everyone gets treated fairly.
Taxes - There are various levels of income tax that need to be paid when someone dies, and Canada Revenue Agency is always first in line, ahead of your family. Any outstanding income taxes for current and past years will be due. Death can trigger capital gains, half of which will be fully taxable. In some situations, RSP assets will also need to be included in the deceased's final tax return.
Funeral - Unless it has been pre-paid, this is one bill that will need to be settled very soon after the alservice. Life insurance can provide the funds right when they're needed most.
Life Insurance – because it’s the right thing to do.
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