Do Retired People (Seniors) Still Need Life Insurance? is a US blog post but the life insurance questions it raises are universal.  The first is of course why would senior citizens need life insurance at all?  Well clearly seniors still have responsibilities.  Here are two of the topics discussed:

Funeral and other expenses can cost thousands of dollars today. The person who passed away could leave debts that need to be settled and assets that need to be handled. Family members may need to travel and to come up with thousands of dollars to settle all of these bills during a very sad and stressful time.

Many seniors may want to transfer their wealth to the next generation. A tax free way to transfer their wealth is by cashing in your life insurance policy and giving them the cash. Paying life insurance premiums, with the assurance that heirs can inherit the money, are an affordable way to plan for this.

Two links are given for further information on life insurance that will be useful for seniors:

• No Medical Exam Life Insurance helps in finding policies that do not require an insurance physical.
• Over 50s Life Insurance gives information on affordable life insurance after 50 years of age.

If you have not looked into your life insurance needs recently, perhaps today may be a good time to do so.

Footnote: If you are interested in books on Insurance, then why not visit the Insurance section of the Personal Finances Bookstore.

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Post from: Senior Money Memos

Seniors Life Insurance

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It is important to ensure that whatever savings you may have accumulated are not eroded or disappear by your making the wrong choices. Clearly it is not sufficient to merely stash the cash under the mattress.

One major consideration is the part that the tax man will take.  A recent article discusses how Insurance policies can unlock secrets to some tax savings. They can be used to pay death taxes or even for tax-free accumulation of capital.

More fundamentally, there is the question of what are the best places to be holding that cash right now.   Here are some of the options (the notes apply to the USA and more details are given in the link):

• SAVINGS ACCOUNTS – are easily accessible and are guaranteed for up to $250,000 by the Federal Deposit Insurance Corp.
• MONEY-MARKET ACCOUNTS -  bank products, as opposed to mutual funds — are among the safest places to keep cash but also have low rates.
• CDs – Short-term bank CDs (Certificates of Deposit) are FDIC-insured up to $250,000 per person per institution and generally offer higher yields than the other basic options.

Perhaps the most important advice is to be found at the foot of that item and is worth repeating here.

1. Make sure you either have or are building an emergency fund.
2. Be sure to have the insurance you’re supposed to have: health insurance, renters or homeowners insurance, and life insurance if someone else is dependent on your income.
3. Save faithfully for retirement.
4. If you have high-interest debt, work on paying that down.

Perhaps that should really have appeared at the start of the article.  It sets the parameters for what you should be safeguarding.

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Safeguard your savings

Technorati Tags: Certificate of deposit, Federal Deposit Insurance Corporation, Savings account

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Downsizing is a natural reaction for seniors as they budget more carefully in times of recession such as this.  Switching to a smaller car seems an obvious choice, particularly with the higher gas prices we are all becoming accustomed to.  However as CNN points out, smaller cars are not smaller in every respect.  Smaller cars can mean higher car insurance rates.

This is hardly news but it bears repeating.  Last year the the Wall Street Journal pointed out that Higher Insurance Costs Erode Fuel Savings on Small Cars.

MSN Money had the same message and showed the following data.

The insurance rates for smaller cars are higher because in a collision you will be closer to the point of impact.  Nowadays they also tend to be used for longer journeys to work, often in more dangerous urban locations.

It would have been great if the initiative of Norwich Union had worked out:

Their ‘Pay-As-You-Go’ car insurance initiative was reliant on GPS systems installed in drivers cars. Monthly, their driving would be assessed based on the time of day the car was used and the mileage and a bill sent according to their results. So, if a motorist did fewer miles at off peak travel times, they would be less likely to have an accident, therefore lower risk and should pay less for their car insurance.
..
They saw a 30 per cent fall in accident rates as people thought about their car use. They hoped that the car manufacturers would start offering the GPS boxes as standard but this did not occur.

Perhaps with time this idea will see the light of day again.

Certainly given the crushing weight of some automobile insurance rates, any way of reducing these will be greeted warmly by those drivers who are affected.

Footnote: If you are interested in books on Insurance, then why not visit the Insurance section of the Money Bookstore.

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Smaller cars, bigger car insurance rates

Technorati Tags: automobile, car, insurance, rate

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