While those who build up enough wealth to provide for themselves and their spouse in retirement probably do not need life insurance, said Schneider, there are other reasons it may be appealing.
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Wealthy retirees may turn to permanent life insurance to help with estate planning. If they set up a trust to hold a life insurance policy, the money can be used to pay any estate taxes that come due when they die, and money left over can flow to the beneficiaries outside the estate as a nontaxable death benefit.
Older parents may also use permanent life insurance to fund a special needs trust for a child who requires lifetime care. Owners of closely held businesses may find that if they die, the proceeds of a permanent life insurance policy can help their children keep the business going while they determine what to do with it.
The dwindling number of people retiring with defined benefit pensions have another way to use permanent life insurance: It may be cost effective for them to opt for the higher single life pension during their lifetime and then buy a permanent life insurance policy to provide a spouse with assets if the pensioner dies first.
The bottom line with life insurance is that just like life, it's complicated. That's why Tumicki recommends seeking out a professional to help you match your life stage with your life insurance. "Most life insurance is sold by an advisor of some sort," she said. "You need to look at your whole financial picture."