Life insurance at retirement point

It seems prudent to have life insurance for each other.

Why?
Most people cease to need life assurance after retirement. What if you financial situation that means you have a financial need?

Does anyone have advice?

Advice is a regulated activity. The board is not regulated to give advice. Just discussion and comment. However, even if advice could be given, you havent told us anything about your situation that suggests a life assurance need. So, for us to "discuss" it further, we need more info.

Consider why you need life insurance. Typically you would not need life insurance because your normal planing would have to include provision for sufficient income for the survivor after first death.

Life insurance could be needed if you've gone and done things like blowing your money on an annuity instead of a combination of drawdown and state pension deferral.

Life insurance could also be needed if something else means that one of the two has income linked to them being alive and the other would suffer financially after their death.

Term life insurance can be very cheap at around state pension age for those in normal good health.

The insurance board on this forum might be a better place for this question as there may be other considerations than just pensions. I've heard some people get life insurance for a few years to cover the cost of inheritance tax should they die before a gift becomes exempt. So there may be reasons many of us wouldn't even think of.

However generally people have life assurance policies that terminate at or near retirement as the financial need is gone. If you or your partner should pass what income are you losing that you need? If they were going to stop earning soon, the children are grown, the mortgage paid off, and the pension is inheritable (or 50% if a DB pension), then what is needed? If something is then get life assurance.

Well, the first aspect of a potential 50% pension is avoiding her getting into that situation by not taking options that would give her only a 50% pension.

If it's a final salary pension that's not avoidable for the final salary part but you may be able to use other savings and investments or downsizing or equity release to provide a higher income for her in other ways.

If it's an annuity that would pay a 50% spousal pension an option might be income drawdown that would give her a 100% pension instead of 50%. And probably at a higher level than the annuity unless your health is poor.

Another option might be deferring her state pension for perhaps ten years if her health is good. That would produce a substantial increase, 58% if she reached state pension age after 6 April 2016 or 104% if before. Increases per year of deferral are either 5.8% or 10.4%. The 10.4% one is mostly inheritable by you if she was to die first, the 5.8% one isn't inheritable. Well, ignoring the case of dying while still deferring.

We don't really know enough about the overall circumstances of the two of you so while you're right to wonder about protecting her it's hard to comment usefully on how best to do it.

duckandweave wrote: »

Government pensions so no flexibility. Wife not entitled to uk pension as never worked in uk and dual nationality.

So there's possibly a financial need. Perhaps talk to an IFA.