Do you still have life insurance? What age did you stop?

[pjigar]

I canceled my term life policy after we had enough nest egg which can generate (current expense - SS death benefits) income at 3% SWR. The idea of death benefit is to have a zero impact on the life of dependents in an untimely event of bread winner's death. Once you get there then there is no point in keeping the life insurance policy. This was my simple math. Someone will point out if I missed something. YMMV.

 

[Badger]

My father took out a couple of small policies when I was a child 70+ years ago. Since then I have used them twice for loans that were paid off with the dividends. 30 years ago the loans were paid off and the dividends have been used to pay the monthly premiums and more paid off insurance so at that point it had become free life insurance. So far the coverage is 3X+ the money I have paid out of pocket. It wouldn't make sense for me to cancel.

 

[Surewhitey]

LI was an income replacement for the need of the family if early death comes knocking, imo. DW believes differently so she has us covered for another 6 years. I'd drop it today if it didn't start an argument.

DD is doing well with 2 kiddos and we're doing fine too. Next time it renews, it'll be too expensive anyway.

 

[athena53]

I always had life insurance through my employer that was usually around 5X my salary. As benefits go, group life is pretty cheap. I tried to get rid of it my last year before I retired. DH was 15 years older, we had plenty of resources and the the value of any employer-paid life insurance over $50K (this was 2013) was taxable income. I asked if I could opt out and they said I had to wait till the next enrollment period. I was gone by then.

 

[latexman]

I started out 45 years ago with life insurance through my employer. 1X my salary was paid by employer; it was the retiree life insurance. Initially, I paid for about 7X my salary (the max) for me and 7X (the max) my salary for DW, IIRC. The company also provided "travel" insurance of about 5X my salary. I even had $10,000 per kid; it was dirt cheap, like pennies a day. So, when I was young, and poor, we had plenty! When I was in my 40's and had over $100k in my 401k, I started ratcheting down DW's and my life insurance by 1/2X my salary every other year, until it went to 0X by about age 55. At that time I still had the 1X and 5X (travel) insurance provided by employer, and I paid for the kids $10k insurance until I retired. After I retired (July 2024) I still have the retiree life insurance. I don't pay for it. It ratchets down 20% a year from age 65 to 70, when it goes to zero.

 

[aja8888]

Whe DW and I got married in 1995, neither of us had much $$$ left after each of us going through very expensive divorces. Well, we had each other and that was the most important thing.

So, we bought two 20 year renewable term policies in case one of us leaves unexpectedly. And that happened in late 2022. I collected on her policy and used the funds to buy a house, although we had plenty of assets by then.

So there could be situations where a term policy may make sense for a period of time.

 

[timbervest]

I had a whole life policy that I took out when my kids were born. About five years ago I noted it had built up substantial cash value. I considered cashing it out but would have big tax impact so I had them convert it to permanent insurance with a higher death benefit and no future premium payments. Not that I really need it but it will pay out on death and it runs on auto.

Had a big term policy that reached maturity and would have had premiums 10x the level term. Like MarialG I let it expire.

 

[Lorenzo]

I had just enough term life insurance to enable my wife, who was still in school, to pay off the modest house we lived in at the time. When she got farther along in her career and we both earned enough to support ourselves individually without relying on the other's income, we let that life insurance lapse. We have no children or other dependents.

 

[OldShooter]

I got a whole life policy when I retired from the Air Force. It has paid for itself for many years and goes up in value more than the yearly payment. It will be a nice sum when I check out and will not be taxed. All those warnings many years ago about not buying whole life seem silly now.

WADR, none of that information tells whether it was a good investment not. Typically any cash value insurance, including whole life, is so burdened with sales commissions and endless fees that it is not competitive with most simpler investments. If you are happy, that's fine, but that says nothing about whether the policy was financially a good deal.

 

[TheWizard]

Married with two kids, I cancelled my small LI policy at 45, once the death benefit on my employer retirement plan became substantial.

And I'm not buying any of that $9.95/month Funeral Insurance they peddle to poor people on TV either...

 

[Kings over Queens]

Do you still have life insurance? If so what type? If not what age or net worth did you elect to stop having it?

Given the numbers you posted you don't need life insurance to replace income or cover debts which was always the first priority (in my opinion) when I discussed life insurance with a client. Nothing wrong with purchasing new coverage to create a large estate, or in your case, a larger estate to pass to your beneficiaries but that is more a "want" than a "need," and there are tons of very creative things you can do with life insurance if you are looking to create generational wealth.

I carried $600,000 in a 20 year term on my wife when the kids were born figuring I'd have money to pay for help while they were young. I let it expire at the end of 20 years with my thanks for doing what it was hired to do.

On me, I've still have the first UL policy I bought when I was 20. $200,000 death benefit plus the cash that's accumulated. It pays me 4.5% tax deferred interest so I dump some cash in it every now and then. My other policy is a 1,000,000 variable UL that I bought about 20 years ago. It's got around $300,000 in cash and is self perpetuating, so I leave it alone, for now.

 

[Ellecram]

I cancelled everything once I turned 65 and everyone in my immediate family was dead.
I kept up my largest policy until my son died in a car wreck and there was no one else who would need taken care of.
I have a small policy to cover burial costs when I die although my estate would be able to take care of it. My cousins are my only family left and I want to make their life as simple as possible when I die.

 

[Midpack]

Like others have noted, there is no need for life insurance once you reach FI. Life insurance is to provide for family/dependents in the event of your untimely death before you have an estate. I never signed up for whole life insurance, and I had term insurance through work. Once I retired FI, by definition I didn't need life insurance anymore.

 

[Carol1862]

Have a small policy on myself and larger on DH. Have had it for 25 years and it expires 2025. It isn’t costing much and would help if something happened to spouse since SS would drop and RMD’s don’t favor widows.

 

[TheWizard]

Like others have noted, there is no need for life insurance once you reach FI. Life insurance is to provide for family/dependents in the event of your untimely death before you have an estate. I never signed up for whole life insurance, and I had term insurance through work. Once I retired FI, by definition I didn't need life insurance anymore.

Righto, for most people.
But if you own a privately held company worth $10-20M, it's often a good idea to have a lot of LI to pay the taxes when you croak.
That's if there's a desire to keep the company in the family going forward...

 

[iloveyoga]

We don't have a lot, but I feel like it is a bad omen to cancel it. I know that is crazy/

 

[OldShooter]

Righto, for most people.
But if you own a privately held company worth $10-20M, it's often a good idea to have a lot of LI to pay the taxes when you croak.
That's if there's a desire to keep the company in the family going forward...

Actually, I think family-owned farms are a big market due to high value and poor liquidity.

 

[jollystomper]

I had a large subsidized term insurance policy through Megacorp until I retired at 60. I then went with Megacorp retiree term insurance, but dropped it at 65 as the premiums were jumping, the payout was decreasing, and my portfolio growth from age 60 to 65 way outpaced the insurance amount.

DW was nervous when I dropped it, as she had an "old school" view of insurance. She also had a superstitious feel about cancelling it. Some of that stemmed from decades ago, when a couple of her acquaintances husbands died without insurance and put those families in a bad financial situation. I did a little spreadsheet exercise to show her that she would not need it, and that had her more comfortable with the decision.

 

[Sunset]

I had insurance through Northwestern Mutual for many years. I canceled it years ago when we achieved FI.

I still have a group policy through a professional organization. I'm keeping it for now as a lottery ticket.

ETA: term insurance is all I have ever bought.

Are you really hoping to win

 

[Telly]

Had Term Life through a professional organization. At age 55 the premium would take a big jump, and more jumps to come with age. All kids were through college, that and the big rate increase said it was a good time to cancel.

 

[zangbao]

My life insurance through work ended when I retired at 50. I figured I didn't need it for retirement.

 

[Alan]

Before I had the wisdom of sites like this my wife took out a VUL policy with a payout to herself in case of my untimely death. 10 years ago at age 60 we decided she doesn’t need it so stopped paying into it, however it has a cash out value of approx $60k (more than the premiums we paid in), invested in a Fidelity Freedom fund which is enough to cover the premiums for the rest of my life so rather than cash it in we have kept it since we don’t need the cash out value and it pay out $500k on my death unless I live to 100

The policy is owned by my wife and she has changed the beneficiaries to our children.

 

[mrfeh]

Do you still have life insurance? If so what type? If not what age or net worth did you elect to stop having it?

Term policy ended when spouse and I were 57. No reason for a new policy.

Doesn't sound like you have a reason either.

 

[Dash man]

I have a 20yr level term life insurance policy that expires in 2028, that I originally bought to leave some money for my son. DW would’ve been fine with her job income. Seventeen years later DW and I adopted each other’s sons and they have their own families. I’m keeping the policy to split between the boys if I should pass before the policy ends. DW has better longevity genes than I do. It’s not that expensive to keep.

 

[Toocold]

I kept my term life insurance through work after I retired. My logic was that the premiums for coverage are worth it, at the end of the term period. Once the term insurance period ended, and the premiums were set to increase substantially, I cancelled, because my assets were more than enough for DW if I passed away.