Please convince me to drop Term Life Ins. and Prof. Org. Dues

[Telly]

Many years ago, when I was at the Big U, I joined a big international technical association for my field. Was told it would look good on the resume back then .

Later, I picked up very cheap term life insurance through them, as I did not have any life ins. other than through employer, and wanted something transportable. Had young kids then, the rate was cheap, got $120K on me, half value on DW.

The years have gone by... been years since the start of my ER, kids are through college and out on their own. And as I have gotten older (eeek!) the rate is climbing. Now about $500 a year for the coverage listed above.

I (sometimes) read the monthly magazine that the prof. org. puts out. I have been able to use the "unemployed" rate of $85 a year, they won't allow "retired" rate (same $) till age 65.

I feel funny cancelling the prof. org., though it is obvious I will not go back to my field. Don't want to, ER too much fun, and the time away and age makes me probably unemployable by the "younger" people running most of it these days. But when I think of cancelling it, it's sort of like I'm closing a big door, making myself obsolete, unwanted sniff sniff.

Now the bill came in the mail for the next half-year of term insurance. The rate had gone up 70% at age 50, then went up another 60% at 55, to the $500/yr of today. Expect another big jump at 60. And the prof. org. renewal will come up late in the year. I can't have the insurance without membership in the org. Seems if I'm going to bow out, now is the time to drop the term ins., then drop the org itself year end.

I know I should drop them, but it seems like I'm losing something I won't be able to get back.

I need convincing, a big push, a whack on the head, something. Help!

[REWahoo]

If your heirs don't need the money, why pay $500/yr to give them a "parting gift"?

As to dropping the professional org dues, more waste of funds. Get over it!

You're welcome.

[brewer12345]

Why exactly do you need life insurance now? Is there an estate planning reason for carrying the insurance? Do you have any dependents who would be in trouble income wise if you dropped dead? If not, I think you have a solid case to keep your $500.

[ziggy29]

There are three main reasons for life insurance (at least which make financial sense): income replacement, business continuance and estate planning/taxes. If none of these three apply to you as a need, yes -- dump it. Save the $585 on annual dues and premiums. Consider the premiums already paid as a blessing that you (or your heirs) didn't have to collect on it.

[FIREd]

It makes no sense to me to keep the professional membership and the life insurance policy ($120K benefit? Must be peanuts compared to your net worth!). Close that "big door" already and get on with it.

[bbbamI]

Ask the kids if they want to pay the premiums and fees...if not, and you don't have a need for the insurance, dump it and wave bye bye....

[HpRyder]

I was in the same situation as you Telly. IEEE term insurance was cut to 70% but the premium remained constant. I called them and they said they would not insure me after 70. So I canceled the term insurance. Additionally, since I was unemployed and their disability insurance came due, they would accept the payment but not payoff since I was unemployed. So I canceled that also. As for the membership, I'll keep that on a year to year basis.

[rescueme]

"Please convince me to drop Term Life Ins. and Prof. Org. Dues"

OK; stop doing it or I'll send "Big Louie" over to your house to break some bones ...

It would be just easier to just say no; you don't need this "crutch" at this stage of your life.

[Katsmeow]

My DH retired at 62 recently. We had an option to continue his life insurance. We ended up continuing only $300k of it because the rate was so high. In our case he is taking SS and I am not eligible for several years. We felt that we needed enough to bridge the gap between now and when I would be eligible for my own SS so plan to keep the insurance for the next several years (in our case, we can decrease coverage and plan to decrease it each year).

FWIW $500 a year for the coverage you have would be very cheap compared to what we are paying.

[REWahoo]

Quote:

Originally Posted by Katsmeow My DH retired at 62 recently. We had an option to continue his life insurance. We ended up continuing only $300k of it because the rate was so high. In our case he is taking SS and I am not eligible for several years. We felt that we needed enough to bridge the gap between now and when I would be eligible for my own SS so plan to keep the insurance for the next several years (in our case, we can decrease coverage and plan to decrease it each year). FWIW $500 a year for the coverage you have would be very cheap compared to what we are paying.

Did you factor SS Survivor Benefits in your calculation? It could be there isn't a lot of gap to bridge and it sounds as if you are paying a lot for the insurance coverage.

[Bikerdude]

$585 a year is like adding $14,625 to your stash at a 4% SWR.

[ziggy29]

Quote:

Originally Posted by Bikerdude $585 a year is like adding $14,625 to your stash at a 4% SWR.

Nicely played.

[samclem]

Some points:
- You bought term insurance rather than whole life way back then because you wanted to "pay as you go," buying the insurance as you needed it. If you don't need the insurance anymore, it sounds like it would be a good idea to drop it.

- That will give you $500 more per year to spend however you want. If you really can't bear to close the door on the professional organization, you could use the first year's insurance savings to pay for about 6 years of dues in the org, which takes some of the pain out of the expense. But, before you do, ask yourself if this is really going to bring you more pleasure than any other use of that money. Do you go to the meetings now, or to the annual conventions? Do you keep in touch with other members of the group? Does the organization provide any tangible/material benefit to you?

[Htown Harry]

In your obituary, "Telly was a widget-maker and a member of the American Society of Widget Makers" doesn't need specific dates.

[Katsmeow]

Quote:

Originally Posted by REWahoo Did you factor SS Survivor Benefits in your calculation? It could be there isn't a lot of gap to bridge and it sounds as if you are paying a lot for the insurance coverage.

I did consider it, but it doesn't totally bridge the gap.

As for me I am still working part time.

We have children under 18 already and they receive 50% of DH's benefits (up to the family maximum).

If DH died, and I wasn't working, I could get benefits while caring for a child under 16 (we have one). However, she will be 16 in a couple of years. At that point I would only be eligible at 60 if I wanted to take reduced benefits (I would prefer to wait until age 62).

Even then, my getting benefits doesn't add that much to the mix since there is the family max. (That is the kids benefits alone would max out the family max).

The only way we end up whole for the next few years is to have some modest life insurance. After that, no need for it.

[chinaco]

IMO - it depends on the terms of the coverage. HOw long can you keep the policy? Is there any premium protection? Do you at least lock-in a rate for 5 years? You probably will get a big premium hike at 60. Try to get an understanding of how premium increases are handled and do some number crunching. If you have any health problems, you could not get life insurance. $500 is not much.

Aside from the cost of premium, you should consider the impact of your death on your spouse. She will loose some SS payments... if other pension sources are reduced, she will have less money to live on. The same goes for you.

[WM]

I agree that keeping the insurance seems to make no sense.

But I don't see any reason to drop the professional membership if you're not ready yet. You're saying membership is $85 per year? It sounds like in another year or two you'll be ready to move on, so I'd count that as a small "nostalgia" cost.

[Koolau]

I went through this head game myself, only BEFORE I retired. My professional organization and certification (two different things) were costing me quite a bit of money. My j*b had morphed away from this particular specialty and my Mega Corp never really honored either membership anyway. Some companies pay for one or both for this particular specialty because it lends incredible credence if one were to ever be called as a corporate witness.

It did hurt me, but I dropped both memberships (as well as membership in a local chapter). No repercussions except that I had a lot more money (well, a couple of hundred more) to do fun stuff with. Honestly, it was partly a thumb in the eye of Megacorp. I felt that they "used" my credentials when it suited them and ignored them (and the effort it took to get them - Masters degree and imagine 2 days in a little room taking a 1000 question series of tests) when it came time for rewards. So.... I showed them! It still hurt, but I got over it. It was like closing a door with a slam instead of a "click".

In the unlikely event that I ever wanted to "practice" again, I would negotiate the issue with a future empl*yer. e.g., "You want me to get certified, you pay all expenses AND provide the time for study AND send me to certification "school". It never came up as I'm happily ERd.

The insurance: Others have given you good council on that. You might even check around. If you are in good health, you could be surprised to find that you could get a better rate on the outside. My "group" insurance at Megacorp was "free" (included, actually) up to a certain level. Further units were available at a group rate. Because of the natural selection of the "uninsureable", the rates were significantly higher than many could have obtained if their health was good.

[kramer]

I think the bigger question is to look inside yourself to determine why you would even be tempted to continue something like this which makes no financial sense. You may learn something about yourself.

Kramer

[Katsmeow]

Quote:

Originally Posted by kramer I think the bigger question is to look inside yourself to determine why you would even be tempted to continue something like this which makes no financial sense. You may learn something about yourself. Kramer

He hasn't yet said that the life insurance makes no financial sense. He has said that he ER'd awhile ago and kids are grown. He hasn't said if his wife would need the money from the life insurance if he died. If she doesn't then I agree it makes no sense to keep the membership and the insurance. On the other hand if she needs the life insurance then it might indeed make sense. (I'm guessing she doesn't but the post didn't actually clarify that point).