Life insurance after retirement?

[mistermike40]

I apologize if this has already been asked... do you carry life insurance after retirement?

I have to make that decision this month. If I pass away before my wife she will receive 65% of my pension, her portion of SS, plus our 401k and stock account... so she is ok with me canceling my insurance policy (through Megacorp... the premium triples in retirement).

I suppose the only reason to carry any is to pass on to our children... when both me and my wife pass away, they would have our 401k plus other assets... but nothing from my pension or SS.

I realize some here have multi-multi-million dollar nest eggs so it's probably moot for those folks. Although I can afford it, I'm leaning towards canceling my policy since it's sole purpose will be to increase my children's inheritance.

Thoughts?

 

[travelover]

I no longer have a need for life insurance. My wife will get my higher SS payment and lose hers, if I kick off before her.

 

[kaudrey]

My SO wants to get it because it is less expensive than taking the survivor annuity option on his rather large pension. We're not quite there yet, but we are discussing things...

 

[racy]

I'm retired and technically, I do have life insurance -- $20K provided free by my former megacorp employer. But, I stopped paying for other life insurance (on me & DW) once our kids were earning adults and we didn't need to insure our income for their support.

 

[MichaelB]

One of my guiding life principles has been to always make sure I am worth more alive than dead. No need to give out any unneeded motivations ..

 

[RobbieB]

No life insurance for me, no dependents.

 

[Car-Guy]

I have a policy as a remaining benefit from mega corp #2 at no cost to me. If I remember correctly it's worth 1.5 times my final annual salary. It won't do me any good but it my be of a benefit to my DW or DD someday. I have "mentioned" it to the DW but I'm sure she has forgotten about it, so it's well documented in my "open after my death" file.

 

[DrRoy]

In a word, no.

 

[flintnational]

We are retired and do not have any life insurance. Typically you only want to purchase life insurance if you have an identifiable need.

Another way to look at it, if you have enough assets and income streams, you can self insure.

 

[Walt34]

I still have some (free from former employer) but it dwindles in payout until I'm 70 and then ends.

 

[RetireAge50]

I chose single life pension and kept my term life policy in place.

 

[braumeister]

If your spouse and/or other dependents would be OK financially after your death, life insurance is completely unnecessary IMHO.

 

[OldShooter]

I apologize if this has already been asked... do you carry life insurance after retirement? ... Thoughts?

I haven't had life insurance for at least twenty years. Early on, its purpose was to replace my income which the family with two kids needed to maintain its standard of living. After kids are gone, mortgages mostly paid, and wife in very good job there was no reason to continue.

IMO life insurance is needed late in life primarily if there are estate liquidity issues where the insurance proceeds are needed to pay taxes or other obligations like buying out a child who does not want to be part of a family business. I have also seen arguments for life insurance with an investment component having some tax advantages, but only from people who sell the stuff.

The only other reason that I can see for insurance late in life is as some kind of ghoulish lottery ticket. But TANSTAAFL applies, so I don't see much financial logic in the lottery approach.

The salespeople like to pound on "permanent" life insurance as if that were some kind of big deal. I don't think very many people need "permanent." They also like to pound on "level premiums" as an advantage, but as we get older our financial ability to pay insurance premiums usually increases so, again, I don't get the advantage other than the agent commissions are higher.

Flame away!

 

[Walt34]

The salespeople like to pound on "permanent" life insurance as if that were some kind of big deal. I don't think very many people need "permanent." They also like to pound on "level premiums" as an advantage, but as we get older our financial ability to pay insurance premiums usually increases so, again, I don't get the advantage other than the agent commissions are higher.

I got taken in by that when I was in my 20's. Not knowing any better I just went to the same agent my father used and got the shaft. Unknown to me at the time I had all the life insurance I needed free from my employer (one year's salary). I was single, no dependents, no debt, why do I need life insurance exceeding what the funeral would cost?

A Lt. at work recommended a book titled "The Mortality Merchants" which was an eye-opener for me. So I called the agent, canceled the policy which had only been in effect for a year or so, and then moved my car insurance to another company. I've made it a point to never give that company another nickel for the last 30+ years.

 

[savory]

We are retired and do not have any life insurance. Typically you only want to purchase life insurance if you have an identifiable need.

Another way to look at it, if you have enough assets and income streams, you can self insure.

This is what I did.

I do have a whole life policy that is paid for by the premium. I stopped paying on it as soon as I felt that my DW would not need the extra funds. From time to time I think about taking the cash value but I think it will help the inheritors with taxes, so I have let it go.

 

[Winemaker]

I have a $50k policy to cover any unexpected costs that may arise upon my demise.

 

[CRLLS]

I have $250K 10 yr term life policy that is expiring in a couple of days. I took that policy out when I was 55. The reason we took that out is no longer a concern. I do not see the need to subsidy DW's next husband's bad habits. . The insurance co would like me to continue the policy at over $9K annual premium, over 11x the previous 10 years. Like that's gonna happen, right?

I also currently have a 25K policy that I took out when I was 21 yrs old. I am in the process of converting it to a small monthly paycheck. In about a month, we will have NO insurance.

We have run the numbers 2 ways: both of us living and one of us surviving. Without the policy, there will be enough for one of us to continue our current and planned lifestyles when one of us dies.

YMMV. It is an individual's choice.

 

[Helen]

One of my guiding life principles has been to always make sure I am worth more alive than dead. No need to give out any unneeded motivations ..

I cancelled mine when we became FI which was several years before I retired. I carried it for a good 20 years since I made more. It was worth it for the peace of mind and I'm glad they never paid out.

 

[bingybear]

I apologize if this has already been asked... do you carry life insurance after retirement?

I have to make that decision this month. If I pass away before my wife she will receive 65% of my pension, her portion of SS, plus our 401k and stock account... so she is ok with me canceling my insurance policy (through Megacorp... the premium triples in retirement).

I suppose the only reason to carry any is to pass on to our children... when both me and my wife pass away, they would have our 401k plus other assets... but nothing from my pension or SS.

I realize some here have multi-multi-million dollar nest eggs so it's probably moot for those folks. Although I can afford it, I'm leaning towards canceling my policy since it's sole purpose will be to increase my children's inheritance.

Thoughts?

she would get the the larger of your SS or hers.

We still have a small joint whole life that we have had since first married. We cancelled our term policy.

If you want to fund inheritance with LI, set up a LI trust. We did not do this.

 

[mistermike40]

Thanks for all the replies. It made sense over the past 30 years to have life insurance... through Megacorp it was fairly inexpensive to have a sizable policy, and the security it provided was worth the expense. Now I can't justify it (and I checked, they do provide a small policy for free).

I hope it's not bad luck to cancel a policy after carrying it for so long (kinda like carrying an umbrella to assure it won't rain)!

 

[athena53]

I quit carrying anything other than the default employer-provided coverage even while I was working in my later years; DH was 15 years older so our assets and his SS would have been enough to support him. When I realized I was paying taxes on the "imputed value" of coverage in excess of $50K from my employer I tried to cancel it but they told me I'd have to wait till the next Open Enrollment. I was gone by then.

In the months after DH died, the Auto Club sent a couple of mailings for "guaranteed issue" life insurance. Yes, there was a catch: if you died within 2 years of issue, you just got your premiums back.

 

[IMATERP]

In conjunction with my upcoming separation, I ran the numbers also and it didn't make too much sense to convert the term policy or obtain a whole life policy. The odds are fairly high that the term policy would expire before I would and it doesn't pay off after age 70.

The whole life policy was very expensive and it just made sense to keep the money invested.

I

 

[gayl]

I have 7.5k thru a prior employer but as no one would be responsible for my leftover bills, no other policy needed. I set up a legacy investment account for kids & grandkids inheritance and they'll also get the paid off house + balance of the 65k I had to pay the day of retirement (account underfunded and this was required to complete conversion to new more limited plan)

 

[Souschef]

I had it during the time my late wife was alive. It was to cover her care if anything happened to me.
Now, I can see no need for it. DW would get my SS and half our investments. The other half goes to my 2 sons.
However, if my ex dies, my kids will inherit a tear down worth $ 2 Mil. In that case my DW gets it all

 

[Mr._Graybeard]

I have a $5K policy my mom & dad took out on me in the 1950s. It has paid me a minuscule annual dividend since I became an adult ... I'd cash it out, but it's only 5 grand. I figure it'll cover my "final expenses."

I think of it as my cradle-to-the-grave policy.