Life Insurance after Fire

[TNBigfoot]

Haven't seen this topic come up. What do folks on this forum do for life insurance after you loose company sponsored plans? My first
Inclination was to not buy any additional but beginning to think
About a 10-15 yr term policy in case anything happens.

 

[athena53]

I didn't. My case is a bit unusual since DH was 15 years older than I was, but even if he'd died first there would have been enough assets to support him. I'd tried, in fact, to opt out of the company-paid life insurance because I didn't need it but was paying incpome tax on part of the value of it as "imputed income". They told me I had to wait till the next Open Enrollment period, but I'd quit by then!

 

[Taxman59]

I dropped the life insurance and took the cash value out when I retired. I figured that we were at a 95%+ success rate on every calculator, and the only purpose for the insurance was to give our sons a bigger inheritance (I ran the calculators with me outliving DW and vis versa and still had the high success rate).

 

[Fedup]

I always have life insurance that is not related to work.

 

[Meadbh]

I have no dependents, so I have never paid for life insurance.

 

[Gumby]

I have a paid up whole life policy, because the young wife will not get a survivor benefit from social security (due to the effects of the GPO) and she is not eligible on her own. If she annuitizes the death benefit, it will most likely match the lost amount of my social security.

 

[brett]

The only significant insurance I ever had was through my employer. It went away when I retired and there was no financial imperative to replace it.

 

[PERSonalTime]

Still have term insurance, but won't renew after it expires. FIRE'd, funeral plans paid, kids grown (even though, like everyone else, struggling at times), sufficient funds for either surviving spouse. Why not enjoy the premium money now while we're still among the living[emoji2][emoji4]

 

[Just_Steve]

I have a term life equal to my final year salary (low 6 figures) it is a conversion policy from group to individual. As having had cancer I would be uninsurable otherwise. It only cost about $15 a month and is valid until I'm 100 years old. The only reason I have it is if I predecease my DW it will give her a few more FU dollars to spend as she sees fit.

 

[Yarnstormer]

I have a life insurance policy that was not thru my employer. They had limits on how much you could buy (salary x 5 I think?) and it was very pricey once you got old!

I'm single so it's a 15 year term policy the kid should be on her own by then no need for it after.

 

[kimcdougc]

DH had life insurance through his job and we had a small policy that we cancelled when he retired. We are now self insured, as we can be.

 

[exnavynuke]

What are you insuring for? Life insurance is generally bought to take care of dependents financially in the event of your death. If you're financially independent, then your dependents should be taken care of now and in the case of your death by your existing finances presumably, and no insurance would be necessary so I wouldn't buy any at all.

The obvious exception being any portion of your financial independence that would disappear in the event of your death. For that situation, I think you should maintain enough insurance to replace that source of income for as long as you feel is reasonable/needed and get it for a term that will cover the time period you think it will be needed for.

 

[2017ish]

What are you insuring for? Life insurance is generally bought to take care of dependents financially in the event of your death. If you're financially independent, then your dependents should be taken care of now and in the case of your death by your existing finances presumably, and no insurance would be necessary so I wouldn't buy any at all.

.....

Agree. We dropped DW's life insurance several years before retirement (never had it on me, as she would have been financially ok without me).

Another exception is for people with large estates consisting largely of illiquid property that is intended to stay in the family (example--to cover the estate tax for the family's 800 square mile ranch or whatever). Also used in esoteric, high end estate planning that I know nothing about.

Exceptions are rare....

 

[TNBigfoot]

What are you insuring for? Life insurance is generally bought to take care of dependents financially in the event of your death. If you're financially independent, then your dependents should be taken care of now and in the case of your death by your existing finances presumably, and no insurance would be necessary so I wouldn't buy any at all.

The obvious exception being any portion of your financial independence that would disappear in the event of your death. For that situation, I think you should maintain enough insurance to replace that source of income for as long as you feel is reasonable/needed and get it for a term that will cover the time period you think it will be needed for.

Originally, this was my plan. What is changing my thinking is I have a trend up in PSA levels and possible prostate biopsy in my future, no diagnosis yet. With possible higher medical costs if there is a diagnosis, was looking at a 15 yr term policy as a safety net doe DW
Currently I'm 100% success for Firecalc in a year barring issues.

 

[jebmke]

Except for company provided life insurance, I stopped buying when I no longer needed it. Then when I retired, the company paid policy stopped.

 

[jazz4cash]

Many people do not need life insurance by the time they FIRE, but I did so I got a 15 yr term policy just big enough to meet my needs. In reality I should have replaced my group life policy many years ago. The term policy is much cheaper if you can pass the physical (e.g. No pre existing issues). My group life policy had a conversion benefit but the cost was higher than the underwritten policy.

 

[Maenad]

Retiring in our forties has been our dream since right after college, so we both have had life insurance to cover the loss of one income stream, so the surviving spouse wouldn't have to keep working until he or she was 65. Once we retire, we won't need it anymore, since neither one of us has a pension that would need to be replaced, and we don't have kids to provide for. Either one of us would be able to live just fine on what we have for both of us.

 

[MrLoco]

What are you insuring for? Life insurance is generally bought to take care of dependents financially in the event of your death. If you're financially independent, then your dependents should be taken care of now and in the case of your death by your existing finances presumably, and no insurance would be necessary so I wouldn't buy any at all.

The obvious exception being any portion of your financial independence that would disappear in the event of your death. For that situation, I think you should maintain enough insurance to replace that source of income for as long as you feel is reasonable/needed and get it for a term that will cover the time period you think it will be needed for.

While I agree with your premise, we are keeping our level term life insurance until it expires. We don't need it for each other and the children are financially independent....BUT.....toward the final years of a 20 or 30 year level term policy....the premium you are paying to insure at your current age is a HUGE bargain! The way I see it....if one spouse dies....the other will have that much more money to enjoy or leave as a legacy to children/grandchildren.

 

[Yarnstormer]

I would keep insurance if I were a couple. The single person's social security benefit would drop would it not? Also tho long term care would still be needed theres also short term care and help that a spouse would provide for free that will no longer be available. Did the deceased do all the home repair? Yard work? Cooking? Financial management? Or any other services that the widow/widower might need to pay for? If it's affordable, a life ins policy is a good idea.

 

[pb4uski]

I always have life insurance that is not related to work.

+1 While my employers provided x times pay, but I had my own personal whole life and term policies. I phased out the term was we became financially independent since it was unnecessary. I kept the whole life because it has an attractive interest crediting rate so I think of it as a bond and any mortality coverage is gravy.

IMO unless you have estate tax issues, if you are FI you don't need life insurance... it is an unnecessary expense.

 

[Beldar]

What are you insuring for? Life insurance is generally bought to take care of dependents financially in the event of your death. If you're financially independent, then your dependents should be taken care of now and in the case of your death by your existing finances presumably, and no insurance would be necessary so I wouldn't buy any at all.

Yes, I'm in agreement. DW & I dropped it after we FIRE'd. The only "Life" insurance we have today (AD&D) is what is complimentary from such organizations such as AAA, NRA, etc. Small payouts but free nevertheless.


_B

 

[joeea]

Haven't seen this topic come up. What do folks on this forum do for life insurance after you loose company sponsored plans? My first
Inclination was to not buy any additional but beginning to think
About a 10-15 yr term policy in case anything happens.

Once we were financially set, we cancelled my life insurance policy.

Life insurance is designed to compensate people who depend on your income for the loss of it. That's all.

Since by definition, you are no longer dependent on your income when you are financially independent, you no longer need life insurance. If you need life insurance "in case anything happens" then you aren't really financially independent yet.

(There are a few more subtle cases where life insurance is used to create a legacy and allow you to deplete your assets more fully, but those are not the basic point of life insurance.)

 

[Walt34]

I have some via a former employer but I don't pay for it. It decreases over time and drops to zero when I turn 70, which isn't that far away. We have enough other assets that DW will be fine with the 30% drop in pension when I assume room temperature and especially if that happens after she is age 66 & a few months.

 

[Brat]

PenFed pays out $500 in case of my death for no cost. I looked at First Tech's policy, I am too old to benefit.

 

[euro]

Agree with others, the FI part of FIRE means, by definition, that life insurance is not needed.