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For many families in the economy of the past five years the question has changed from when retirement will come to how long a person can work. Along with that change, the question of what life insurance portfolio structure is most prudent for seniors has changed dramatically.

We all remember the good old days when everyone worked to 60 or 65 and then retired with an income for life that was adequate to live off of. Since, in the good old days, this income usually carried on to a surviving spouse to the end of their life, final expense life insurance was all that was needed in most cases. The other thing that was truly different back then was that people purchased houses and paid them off and lived in them until they couldn’t anymore or died. Financial planning was almost non existent.

That story has slowly changed over the last 50 years. Companies started offering options of retirement packages. Option one was as described above with a lifetime income for both. Option two was to take a higher income, but have the surviving spouse’s income cut in half and option three was to get an even higher income with the surviving spouse receiving no more income. Since men were the primary, if not only, breadwinner and men generally didn’t outlive women, this left widows in a position that needed to be considered if option 2 or 3 were picked. Through this period America also changed in the aspect that they no longer lived and died in their first house.

It was during this period that the use of life insurance as part of the retirement package came into play. It wasn’t hard math to do. If you could take the most income at retirement and the difference between that and option 1 was more than enough money to pay for a substantial life insurance policy, you had your cake and got to eat more of it. The surviving widow didn’t have the retirement income, but she had the tax free life insurance proceeds to create her own retirement from. This worked most of the time and is still a method looked at today by those people who will retire with income.

Today more people have personal retirement accounts than company sponsored retirements. All of us have taken a beating with the hole blown in the economy starting in 2008. Now companies and municipalities are using bankruptcy to get out of paying retirement that people have often faithfully worked 30 or 40 years (or more) to accumulate. Times have changed and so have the parameters of what a prudent life insurance portfolio should look like. For a huge number of people over 50 life insurance has become the only way to ensure that your surviving spouse is taken care of. That is part of plan B which is now to work as long as we can.

I have urged often and loudly that especially for those over 50 and over 60 term life insurance should be purchased to make up for the loss of capital and the loss of growth in our retirement portfolios over the past 5 years. Sure, hang on long enough and it might come back, but folks it is no longer the value of a company that drives our investment growth or loss. The worst that could happen is that your widow might end up with more than she planned on and with term insurance or term/UL, there is no penalty for dropping it if you decide we are once again on solid ground.

Bottom line. The world has changed but what hasn’t changed is the plan of action for final expense life insurance companies. Their overpriced and under guaranteed products are no longer appropriate, if they ever were. Today life insurance should be a major part of our financial planning if we are nearing what used to be retirement age. the good news is that at least the life insurance part of the plan can be rock solid.