Many Americans of working age know that life insurance is an important part of protecting their family if something happens to them. But as you approach retirement, is life insurance still a valuable tool? While conventional wisdom may be that you no longer have to worry about replacing an income, there are several situations when having it is a wise investment. Here are five of the most common reasons to invest in life insurance when retiring.

1. You'd Leave Debts

If you pass away today, would you leave behind any debts that impact surviving family members? Sharing debts with a spouse or holding secured debt on a home or other assets they need means you leave them a burden to pay off even after you're gone. A life insurance policy pays off these specific debts so that their inheritance isn't reduced. 

2. You Have Dependents

Increasingly, parents and grandparents are retiring while they are still responsible for children and young adults. Dependents who rely on your retirement income for their housing and living expenses are at the same risk if you die as they would be if you were still working. You may want to continue carrying life insurance until they are no longer your dependent. 

3. You Still Earn Income

If you pass away, your remaining retirement assets would go toward providing for heirs. But what if some of your income during retirement comes from your own work? This could be a side gig, consulting work, part-time work, or even a monetized hobby. If this income would cease upon your death, it should be replaced through insurance. 

4. You'll Use Your Nest Egg

Many people enter retirement without as large a nest egg as they would like. And while your retirement money's first goal is to provide for you until you pass on, it can be disheartening if little or nothing will be left. A life insurance policy is a cost-effective way to leave a legacy for family members, even if you end up using all your retirement money. 

5. You Need to Lower Taxes

Will your estate be subject to taxes? If so, consider life insurance as a tax-advantaged way to reduce these. Life insurance proceeds are generally tax-free both to the buyer and the beneficiary. Therefore, you could spend non-tax-advantaged funds during retirement and leave behind assets with fewer tax obligations. 

Want to know more about how a life insurance policy might fit into your retirement plans? No matter what your goals, financial situation, or family makeup is, the best place to begin is by consulting with a life insurance provider in your state. Call today to make an appointment.