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Opinion wanted: Term Life insurance
Old 01-19-2013, 11:50 AM   #1
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Opinion wanted: Term Life insurance

I've always tried to minimize insurance costs and I put off buying term life insurance until age 40 b/c wife retired and we were getting ready for child number 3. I purchased a 10 year 750k policy and now I'm 49 and really close to FI. My wife would probably be more comfortable if I bought at least a small term policy for at least a few years, especially since she has lost her skills to go back to work (out of her field for 10 years now). I belong to AAA and just received an offer for 200k/10year at $40 per month without any medical exams, lab work, etc. What do you guys think? Thanks in advance.

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Old 01-19-2013, 01:28 PM   #2
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With dual income families it may not be as straightforward, but term life insurance is essentially 'buying an instant estate' to take care of your family in case something were to happen to you. It's the responsible thing to do in case your earning power is lost. Once you have an estate, meaning a substantial $ nest egg and/or other solid income sources, you no longer need "insurance." The decisions rests on what assets she and your children would have without you. You haven't shared that, and there's probably no need to. If your family is FI, you probably don't need any term life insurance.

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Old 01-19-2013, 02:49 PM   #3
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I am going through term life insurance buying business and I can tell you one thing, do your homework. Get an agent that will shop around for you with multiple companies at one time. If this is a good deal or not, you could get a VERY ROUGH idea on (No affiliation but was impressed with their service, TransAmerica messed it up so didn't buy from them)

200K is almost peanuts but if you have any health concerns then it may be a good deal for $5000 over the period of time.
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Old 01-19-2013, 05:46 PM   #4
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Thanks for the input. I'm so close to FI and my finances are organized well so my wife and kids would probably do quite well. My 750k term policy is up at the end of this year and this is the reason for my questioning should I get a low amount (200k) of term insurance until we are completely FI. I just noticed there is another thread running now with the same question with lots of good opinions. In the end it's a risk/benefit question I guess.
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Old 01-19-2013, 07:02 PM   #5
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I didn't reply on the other thread.

I think alot has to do with your family's comfort with the FI number you estimated (is it based on <3% SWR or more) and how you created the expense budget (conservative, comfortable, etc). I think with kids, the budget can change unexpectedly, i.e. activities, education, accidents, etc.

I'm 43 and have several term life policies, 10-25 years in length. I factored in the cost to my ER budget. I'll probably semi ER in a few years, but I'll probably keep the policies until I'm 60. If my health is ever questionable, I'll tell DW to keep the policies enforced. Sure I would rather never use it, but if I'm close, my DW/kids can enjoy the extra $$.
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Old 01-19-2013, 07:28 PM   #6
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Don't forget to consider what your wife/children would get in social security survivor benefits based on your work record. In my case, the benefits DH would get as the surviving spouse caring for our kids plus their benefit would roughly equal my take home pay, and vice versa, so we have for the moment elected not to get additional term life insurance. We do both have policies through our employers as well -- those would allow us to pay off the mortgage.

I have considered buying some extra coverage just to top things off and give us more options. But DH is almost 55 and until recently was a smoker, so we probably couldn't get a very good rate for him. If I precede him, he'll get all my retirement savings, a good portion of which is now in a Roth 403b, so he should have plenty to fall back on.
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Old 01-20-2013, 04:22 AM   #7
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If your wife would be more comfortable with more insurance I think you should discuss it with her. If her concerns are valid (you don't have to agree with her for them to be valid) and very important to her I would get the insurance.

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Old 01-20-2013, 05:41 AM   #8
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There are two questions here. Should you get new term insurance, and is the AAA offer you got in the mail any good. It sounds like your wife thinks you need the new coverage, and if you cannot show her why it is not needed, she is most likely correct. As for the AAA offer, my guess is with some effort you can always do better than an offer than comes in the mail.

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