Should Seniors Buy Credit Insurance?

Financial advisers will tell you, with a gleam in their eyes, that your expenses will be lower when you retire, and you spend your 50s and early 60s looking forward to all that money sticking around that you no longer have to spend on dry cleaning your work clothes and parking at your place of employment. Many seniors are in for a disappointment about the drop off in expenses that their financial advisers promised. For example, your kids do not stop being expensive just because they are grown up. Many adults in their 20s or 30s receive help from their parents to cover the costs of necessities, and the ones who can afford more than necessities, such as a down payment on a house, can only do it because of their parents’ help. Likewise, the increase in grocery prices is likely to eat up any surplus that your budget might have because of the savings on work-related expenses. You can start enjoying your retirement once you accept that you will need to be at least as frugal after you retire as you were when you were working. In retirement, as in any other phase of life, insurance coverage can protect you from financial catastrophe, or it can be an unnecessary expense. To strategize about which insurance coverage you need to protect yourself and your heirs, contact an Orlando estate planning lawyer.

What Protections Does Credit Insurance Provide?

People who can make it through retirement without borrowing are the lucky few. High prices spare no one, not even the most frugal seniors who are far too old and wise to keep up with the Joneses by buying expensive toys. You might need to make bigger purchases on your credit card than you can pay off in a single month of retirement income. If you own a house, you might need a reverse mortgage. Seniors form a substantial portion of auto title loan borrowers. If you still owe a balance on your debts when you die, the personal representative of your estate will have to settle your debts before your heirs can inherit, and there will be less for them to inherit when the estate settles.

This is where rich people start talking about establishing a trust, but there might be a simpler solution. You can buy a credit insurance policy, even though the policy only applies to one loan. A credit insurance policy will pay your loan balance if you die before the loan matures or if you must retire earlier than you anticipated because of illness. As with any insurance policy, you should investigate specifically what it does and does not cover. Credit insurance can be helpful if there is a specific loan that you are worried about messing up your probate case, but if you buy only one insurance policy to protect you in your old age, it should be long-term care insurance.

Contact Gierach and Gierach About Insurance Coverage in Retirement

An estate planning lawyer can help you think clearly about insurance purchases and other retirement-related financial decisions.  Contact Gierach and Gierach, P.A. in Orlando, Florida to discuss your case.

Source:

insurance.wa.gov/insurance-resources/credit-insurance/credit-insurance#:~:text=Credit%20insurance%2C%20or%20debt%20cancellation,making%20payments%20on%20your%20behalf.