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FIRE and Life Insurance
Old 03-01-2016, 02:15 PM   #1
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FIRE and Life Insurance

My DW and I are both retired. As a benefit of my recent retirement I have the ability to continue the life insurance paid for by my company while w*rking. It would cost about $200/month for $300K coverage and would not require a health assessment of insurability.
Do most of you retirees have life insurance and if so, why? I have always been of the belief that life insurance protects income...since we have no significant income in retirement why buy life insurance?

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Old 03-01-2016, 02:24 PM   #2
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I stopped paying for life insurance once I gained financial independence, because it was no longer needed.
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Old 03-01-2016, 02:27 PM   #3
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The only life insurance I have is a whole life policy my parents bought for me when I was a child. My DW will get like $18k if/when I kick the bucket unless I cash it in.

We really haven't had life insurance for quite a while. All my calculations said either one of us would have enough income to pay expenses should one of us die. Then kids moved out and we got to FIRE so even less need.
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Old 03-01-2016, 02:28 PM   #4
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I stopped some time when my children made it to the mid-teen years, and I figured I had enough for them to survive on until the young adult age if I suddenly croaked.
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Old 03-01-2016, 02:29 PM   #5
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Hey Trooper.

The main question that you should answer is ~Do I really have a need for LI? Once you figure that out, you can arrive on an amount of coverage that your family needs to replace your income if you die too soon.

I canceled all of my LI a few years prior to retiring @ age 58 because we had enough invested to meet all future needs if I died early. Not dead yet.
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Old 03-01-2016, 02:30 PM   #6
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I have always been of the belief that life insurance protects income...since we have no significant income in retirement why buy life insurance?
I think you just answered your own question. If you're FI, as MichaelB points out, you have no need to insure your income stream.
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Old 03-01-2016, 02:34 PM   #7
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Besides, you always want to make sure you're worth more alive than not alive. No need to give any unnecessary motivation .
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Old 03-01-2016, 02:37 PM   #8
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Once I felt our finances were sufficient to support DW, dropped insurance. Figured if I died, I wouldn't need it.
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Old 03-01-2016, 02:41 PM   #9
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$200/ month for $300k of insurance seems like a pretty high premium. Is that whole life? I currently have a $250k term life policy that runs me $60/month at age 58. Premium slowly increases each year.


I plan to cancel it shortly after I retire.
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Old 03-01-2016, 02:44 PM   #10
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Besides, you always want to make sure you're worth more alive than not alive. No need to give any unnecessary motivation .
+1. I have not had life insurance since I was in my 20s. Other than the employer paid, 1x salary policy.
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Old 03-01-2016, 05:13 PM   #11
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I decided to maintain coverage until the mortgage is paid off. I had the option to continue employer's group life coverage but I switched to a level term policy which is much much cheaper but requires a physical. I wish I had switched off of my employer's group life policy many years ago.
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Old 03-01-2016, 05:47 PM   #12
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$200/ month for $300k of insurance seems like a pretty high premium.
+1. OP - You're paying too much for so little coverage. I bought term life when I was 35 for 30 years fixed premium of 1500/year for a 1M coverage. I'm planning to retire at age 55 in 2020 but I'll let that policy expire on its own in 2030.
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Old 03-01-2016, 05:51 PM   #13
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I considered dumping my term life when I retired but it's $19 a month for $400k and won't adjust for another 8 years. It's cheap and if I kick off early...I guess my DW will get a 'bonus' of sorts.

Sent via mobile device. Please excuse any grammatical errors.
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Old 03-01-2016, 05:54 PM   #14
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I have some residual from my former employer that was part of the normal package. When I retired it was equal to (I think) one year's pay and it steadily declines to nothing at age 70. I could have bought more at the time but it wasn't necessary.
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Old 03-01-2016, 05:57 PM   #15
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If you have sufficient retirement savings for your spouse to live if you died, then there is no need for life insurance.

I didn't renew mine once the children were done college as they were independent, and our savings would support DW in retirement.
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Old 03-01-2016, 06:08 PM   #16
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Besides, you always want to make sure you're worth more alive than not alive. No need to give any unnecessary motivation .
Great point MichaelB!
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Old 03-01-2016, 06:11 PM   #17
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+1. OP - You're paying too much for so little coverage. I bought term life when I was 35 for 30 years fixed premium of 1500/year for a 1M coverage. I'm planning to retire at age 55 in 2020 but I'll let that policy expire on its own in 2030.
Thanks. I think I am going to decline the coverage based on the fact that I don't need it, rather than it is too expensive. Even though it IS too expensive.
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Old 03-01-2016, 06:21 PM   #18
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Besides, you always want to make sure you're worth more alive than not alive. No need to give any unnecessary motivation .
Reminds me of an old work joke. The spousal benefits for a line-of-duty death were fairly good. If it was within the jurisdiction the spouse got 10 times your annual salary. If it was work-related, within jurisdiction and on public transportation (like a bus or subway) it was 20 times your annual pay. (I have no idea why.) If it was outside the jurisdiction, work-related, and on public transportation (like an airliner) it was 30 times your annual pay.

So if the trip was work-related, out of jurisdiction, and involved public transport, you made doggone sure to pack your own bag.
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Old 03-01-2016, 07:42 PM   #19
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I dropped term coverage long ago after we were FI and no longer needed the coverage.

I still have a whole life policy that I bought when I graduated from college but more as a bond substitute. It is currently earning ~4%.
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FIRE and Life Insurance
Old 03-01-2016, 07:54 PM   #20
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FIRE and Life Insurance

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Once I felt our finances were sufficient to support DW, dropped insurance. Figured if I died, I wouldn't need it.

+1...and welcome back !

I've thought of a scenario when one of us required extensive care and hospitalization but ending in death resulting in depleting significant assets much faster than plan. And thinking ..life insurance might be nice to replenish the surviving spouses pot of gold.... But it's only been a fleeting thought / mind scenario.

The "unplug me" directive that I signed hopefully avoids the above scenario for my family ...

For us, we cancelled life insurance when we FIREd... We have 2 teen aged kids.
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