Just retired... cancel term life?

[Animorph]

I cancelled mine shortly after retirement.

One reason to keep it would be if one spouse is financially strapped if the other one dies. If DW dies, her pension will probably go away (don't think I'll go joint life, she's 5 years younger than me), along with her SS. That leaves me a little worse off than she would be if I died. However, I'm the financial planner and figure I can get by fine with less. So no life insurance for us.

[catotx]

If this is a term policy with fixed yearly payments, it actually becomes "cheaper" when you get older. For example, you might be paying $500 a year for a 25-year term. The coverage you get for the $500 at 30 years old is the same as when you are 50 years old, making it relatively cheaper as you get older.

[Debinnov a]

Thanks for the responses! Yep, no debt really except one mortgage and that will go away when we retire and purchase final home with cash.

I was thinking that the amount we are paying now for our life insurance could go towards a long term care policy. I keep going back and forth on LTC, but I tend to rather be safe than sorry. DH diagnosed with Type 2 Diabetes and both of us have some other minor health issues so LTC probably makes sense.

Deb

[martyp]

I would think is depends on why you bought the term life insurance in the first place. If that need is still there then keep it. If not then cancel it.

I bought term life insurance when we first bought our house. The purpose was to enable one of us to keep the house if the other one died. Once our incomes were high enough so that that was no longer an issue we cancelled the insurance. That was 20 yrs ago.

[rrppve]

Given that the death benefit is only 10% of your net worth, it doesn't make sense to keep paying the premium from a financial planning perspective. However, your current age and health circumstances may make it a decent investment, if you bought it a while ago and your health has declined, albeit one that I'm sure the beneficiary would prefer not to collect on.


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[PERSonalTime]

Will keep my inexpensive term insurance until the term expires in a few years. No need to renew after that because I'm ER'd and don't have any income I need to replace. No small kids either. Enjoy life!

[Milkman]

We dropped our Term life insurance after we paid off our mortgage and then added an umbrella policy.

[kcowan]

I pay $930 per month for $500k. It is flat and good for life. Every ten years it costs $111,600. I figure if I live to be 90, it will have been a bad decision. I am hoping that is the case because by then my other investments will make it look like chicken-feed.

But if I die by age 85, it will ease the capital gains bite.

[Kamei]

We did that as well.

[Dixie19]

Mine is so cheap I'm currently keeping it as an inheritance bump for my 3 kids since they're young adults who've not yet purchased homes, etc. I'd be pleased to leave them that gift.

[Cat-tirement]

I never bought term insurance myself, though Megacorp provides a pretty good amount at no charge. I don't plan to replace it when I retire. I did recently drop a supplemental disability policy in light of my retirement later this year.

[Badger]

At $165/m + your premiums I could have a great time with the extra money living life instead of the payout going to someone else when I die.

I have a similar retirement nest egg. When employed I had life insurance through the college, about 2k free from the credit union, and $37k whole life my parents took out when I was a child. I still have the credit union and the whole life since it is paid up so I now get dividends that pay for additional insurance. I'll probably stop the additional insurance and just take the dividends to spend.

If your house is paid up and there are no children what would you need the insurance for?

Cheers!

[ivinsfan]

If you aren't certain you want to drop the insurance and are both in good to decent health, I'd reshop for a cheaper 10 year level term. You price seems high. My DH had the same dollar amount for 700 a year from age 55-65. Dropped it this year as the new cost would be 15000 a year for 65-75. No medical required, which is probably part of why the price was so high.... Thought about policy shopping and repricing but just dropped it instead. At some point in life term insurance just makes itself unaffordable.

[RE2Boys]

For the last few years, I've been debating if I need to continue my 20 yr level term. Originally purchased it when second son born to supplement my wife raising the two sons. When took early retirement, kept it as my pension survivor benefit would be 55% of original.
But time has gone by, boys are 15 and 17 now, and policy has last renewal in 2018, $300K for $750 per year. Portfolio withdrawal rate has been running 1%, regular living expenses covered by pension and part time work. But college will force the WR to spike to 4-5% for a five year period.

[brett]

Did not renew my term insurance after I retired. It was a small add on policy to megacorps term plan. Do not need insurance now.

[Loving Life]

I retired last year with investments greater than 2m - one of the agreements I made with DW was to obtain 3/4 of a million policy - DW is 10 years younger that me, I she did not feel comfortable without the insurance - its cheap and it makes her feel good.