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Just retired... cancel term life?
Old 07-04-2014, 12:13 AM   #1
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Just retired... cancel term life?

DH and I just retired. We both have $250k term policies and I always assumed once we retired, I should cancel them. We probably will have approx. $2.5M nest egg when all is said and done. The recurring monthly charges seem silly - DH is 50 and premium is $164 mo. Not sure what mine is but we are trying to really lower expenses. No kids at home or dependents.

Would love to hear what others have done.

Thanks!

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Old 07-04-2014, 12:20 AM   #2
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Did exactly what you assumed: canceled, for all the reasons you list and imply.

So far so good.
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Old 07-04-2014, 01:13 AM   #3
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Easy decision for me- I'm single
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Old 07-04-2014, 02:25 AM   #4
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I haven't retired but I cancelled when my premium was due. The reasons for having life insurance no longer exist.


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Old 07-04-2014, 05:40 AM   #5
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Great timing. Just today received my annual bill. One more year to go and then I'm done. My plan is to jettison the term life this time next year. Our assets are sufficient.

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Old 07-04-2014, 06:24 AM   #6
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All you have to do is not pay the bill and it will be cancelled.


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Old 07-04-2014, 06:55 AM   #7
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Hi Deb,
If you're not insuring against a loss of needed income, then you don't need 'life' insurance. Since you're examining expenses, have you looked at car insurance lately? (ie paying comprehensive on an old car?)
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Old 07-04-2014, 07:10 AM   #8
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I cancelled long before I retired as I no longer needed the coverage.
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Old 07-04-2014, 07:18 AM   #9
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What was your plan when you bought the policy?

Both DW and me got $500K for 20 years after my first kid's birth. We don't need the policies now. But most likely we will keep them, as they are pretty cheap.
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Old 07-04-2014, 08:09 AM   #10
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Retired last year and let my 20 year term policy lapse a few months ago. No need for the protection anymore.
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Old 07-04-2014, 08:12 AM   #11
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I cancelled my term policy this year as well for all of the above reasons
and because it covered accidental death, but not death from disease
or natural causes, the likelier outcome at my age.
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Old 07-04-2014, 08:32 AM   #12
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Retired yesterday (wife still working). I haven't dropped altogether, but greatly reduced, down to just above burial amount. Not a big cost. Once all of our retirement monies come on line & wife stops working (2-3 yrs) probably will drop the rest.
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Old 07-04-2014, 08:38 AM   #13
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I carried life insurance until a few years before retiring. One important rule in my life:
Quote:
Always be sure you're worth more alive than dead. It doesn't make any sense to motivate others if it ain't in your best interest.
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Old 07-04-2014, 08:58 AM   #14
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Since term life is meant to replace loss of income you obviously should cancel when you stop working. I actually set up laddered 10 year term life policies and cancelled the oldest ones at intervals as I got closer to FIRE. I will cancel my sole remaining policy ONE year before my FIRE date as my employer has a benefit of one year salary for my beneficiaries in case of death.
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Old 07-04-2014, 09:13 AM   #15
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Quote:
Originally Posted by martyb View Post
Retired yesterday (wife still working).......

Well you just have a great Independence Day, you hear? Congratulations!
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Old 07-04-2014, 09:31 AM   #16
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My old employer provided a policy that gave me 2X my salary. I came close to cancelling it a year after I retired but have decided to keep it as an investment for my heirs.

The premium is very low. I've got enough funds that the payment is not needed for anything else. I'd be investing it for long term return anyway. I calculated a return on my total payments going forward and assumed it would pay out in less than 40 years (I'm 62). I didn't think I could match that return.

Of course, the picture wouldn't look so good if I included the payments for the last 28 years when I was working. However, these are sunk costs and were paid by my employer anyway.

Edit: I may have to rethink cancelling this policy. I redid the calculation & got a 3.66% ROI if I live for 30 years. That's better than any other guaranteed investment right now but probably not better than my total portfolio will do.
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Old 07-04-2014, 09:42 AM   #17
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Originally Posted by pb4uski View Post
I cancelled long before I retired as I no longer needed the coverage.
+1
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Old 07-04-2014, 11:32 AM   #18
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We are going to keep ours until all income streams come on line and then re-evaluate; the premiums are pretty cheap if we keep it too.
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Old 07-04-2014, 11:45 AM   #19
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I probably should have mentioned that although I'm now retired, we still have a mortgage. I'm planning/hoping to be able to either pay it off or at least get it substantially reduced within the next 3 yrs. Once that's done, there most likely won't be a need for life insurance at all after that.
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Old 07-04-2014, 12:02 PM   #20
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Yep, sounds pretty silly to keep paying for that term given your current assets. Sounds like you are self insured now. You didn't mention any debt, I'm assuming its minimal if not nonexistent.
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