Do Retirees Still Need Life Insurance? Here's Why It Might Make Sense
Do Retirees Still Need Life Insurance? Here's Why It Might Make Sense
When you’re retired and have built up some wealth, it’s easy to think life insurance is no longer relevant. After all, the kids are grown, the mortgage might be paid off, and there’s money in the bank. But for many retirees in Ontario, life insurance still plays a powerful role in protecting and transferring that wealth efficiently.
At Brewitt Financial, we work with retirees to help reduce taxes, equalize estates, and leave a legacy - all while keeping things clear and low-stress. Here are a few reasons why life insurance still matters, even after the accumulation phase:
1. Covering the Tax Bill
Capital gains on cottages, investments, or second properties can create a large tax liability at death. Life insurance can provide a tax-free payout to cover those taxes, so your beneficiaries receive the full value of your estate - not what’s left after CRA takes their share.
2. Estate Equalization
Not all assets are easy to divide. One child might inherit the family cottage, while the other receives a cash equivalent. Life insurance makes equalization possible without selling off treasured assets.
3. Charitable Giving
Want to leave a legacy? Insurance can be used to fund a significant donation to a cause you care about - often with tax benefits during your lifetime or at death.
4. Supplementing Retirement Income
Certain permanent insurance policies can build cash value, which may be accessed tax-efficiently during retirement. This isn’t the right fit for everyone, but it can be part of a broader retirement income strategy.
5. Liquidity When It's Needed Most
Settling an estate takes time. A life insurance payout can provide immediate, tax-free cash to cover final expenses, probate costs, or family needs - without selling investments at a bad time.
Life insurance isn’t just for young families - it can be a smart, strategic tool for retirees with wealth to protect and pass on. At Brewitt Financial, we help Ontario retirees review their estate and tax situation, determine whether insurance fits into the plan, and shop the market for the right solution. If you're thinking about the next generation, the tax man, or just want to make sure your legacy is secure - let's talk. A short review could save your family hundreds of thousands down the road.