Do Empty-Nesters Need Life Insurance? Here's What Dave Ramsey Says

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KEY POINTS

  • You might think you don't need life insurance once you reach a certain age.
  • It's important to protect your loved ones at all stages of life.
  • You could change the type of policy you have as you get older.


Here's some information that could help you make the right call.

There are certain life events that might inspire you to apply for life insurance. Getting married, for example, could trigger that decision, especially if you have large expenses you're taking on jointly with a spouse, like a mortgage.

Similarly, having kids tends to inspire people to apply for life insurance. After all, if you're bringing children into the world who will be dependent on you for financial support, it stands to reason that you'd want to protect them to the best of your ability.

But what if you reach the point where your kids are grown and moving out, and you've yet to put a life insurance policy in place? Should you bother with life insurance at that point? If you ask financial guru Dave Ramsey, the answer is a resounding yes.

Empty-nesters need life insurance, too

If you've spent your life raising children, becoming an empty-nester could be an adjustment. But if you don't have life insurance at that point, it isn't too late to apply.

Quite the contrary -- while your kids may no longer be reliant on you for financial support, the same may not hold true for your spouse. And so it's important to put the right protection in place so your spouse isn't left in the lurch.

Let's imagine your kids have all moved out of your home and have thriving careers. You may, at that point, still have another 10 or 15 years left before you and your spouse are set to retire. During that time, you may have some aggressive goals -- pay off your mortgage, boost your IRA, and pump more money into your brokerage account to line up a nice stream of income for your senior years.

But what if you pass away suddenly? At that point, your spouse may not be in a position to pay off the mortgage on their own income, or to boost their IRA contributions.

The last thing you want to do, says Ramsey, is leave your surviving spouse in a financially insecure position in the years leading up to their retirement. And for that reason, life insurance makes sense.

What type of life insurance should you get when you're older?

If you and your spouse are in your 50s and your kids have moved out, you may want to consider a term life insurance policy with a large enough benefit to replace a few years of your income and pay off any debts you hold jointly with your spouse, like your mortgage. You may find that a 10-year policy will suffice in that regard. That way, you can protect your spouse until they're old enough to start collecting Social Security benefits and tapping an IRA without penalty.

This isn't to say that you can't go out and purchase whole life insurance. But the cost there could be prohibitive. And if you have other financial goals you're working toward, you don't want to tie up too much money in costly premiums.

No matter what type of insurance you choose, don't make the mistake of thinking you don't need coverage at all just because your kids have all left the nest. Not only might your spouse still need protection, but you never know when an adult child may need to move back home. The last thing you'd want is to leave that child in a tough spot financially by neglecting to put insurance in place.

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