Protecting Your Vision of Retirement
We've all heard it many times before: Get an early start
on your retirement planning to boost your odds of success.
However, many overlook a critical component of such planning
' life insurance. One reason is that many rely too heavily
on employer-sponsored, or 'group,' life insurance. While
group life insurance is convenient, over-reliance on group
life insurance may be detrimental to your retirement plans.
Here's why:
- When you retire, the insurance you receive through
your employer typically retires with you. If this was
the majority of your life insurance, you may find that
you are now underinsured. Purchasing additional
insurance at this point may be prohibitively expensive
or even impossible due to health issues.
- Some have estimated that the average professional
today will have five to seven different employers
throughout his or her career. Most group insurance
cannot be carried from one employer to the next. This
lack of portability can have devastating consequences.
Those who experience a job-eliminating disability,
perhaps due to cancer or heart disease, may find
themselves without life insurance as well. As noted
above, finding other coverage may be expensive or,
worse, impossible.
- The cost of group life insurance coverage can be
more than you think. It's important to consider all the
costs of your group policy: taxes charged on the cost of
life insurance over $50,000 as well as whatever your
employermay charge you for coverage. The total of these
amounts may be more than the cost of an individual
policy.
- Upon comparison, a healthy person may find it more
cost effective to have an individual policy. Insurance
companies typically offer lower rates to healthier
individuals, Group insurance doesn't offer the same
discount.
- Social Security and pension income may decrease
significantly upon the death of the primary recipient.
This can have an obvious impact on retirement income
stability and emphasizes the need to maintain life
insurance well into retirement.
It's important to consider these points when planning
your retirement to make sure you've got the right type and
amount of insurance to meet your needs.
Courtesy of Ameriprise Financial Services, Inc.
Thomas E. Planinsek, Financial Advisor
Suite 103B Berkshire Center
Route 30 East
Greensburg, PA 15601
724-832-0855