Term Life Insurance: When to stop paying it?

[megacorp-firee]

When my kids became independent and capable of making their own way in life, we to canceled my DWs term policy. The policy was provide for home and child care in the event my DW was no longer around to provide that care. When I FIREd, we canceled mine because DW would receive my pension payments and SS in the event I died.

IMHO, one should use insurance as THAT, insurance to provide for catastrophes. If I sold my house and no longer had a reason to buy home insurance wouldn't I cancel that policy too? nuff said.

 

[73ss454]

Mega, well sorta. If you don't have a house you don't need ins. but you'll still have a life. You may not feel you need LI but some folks would disagree.

In my case I still hold a Whole Life Policy for 500K. I've had it for 22 years and really don't need it at this point but if I cancel it I'd create a taxable event. At this point it mostly pays for itself and when I die DW or the kids would get 500K tax free. Also at some point I can cash it in and do a SIPA if I needed to. Not that I'm an annuity fan but it's an option. At 61 I'm still not sure what to do with it. No Male in my family has ever lived to the age of 70 so for the family sake I hold it, at least for now.

 

[brewer12345]

Sdfire, I would let the disability policy go, too. If you have sufficient assets to support you without working, you do not need disability insurance.

 

[REWahoo]

I view keeping disability insurance once you are FIREd the same as keeping boat insurance after you sell the boat...

 

[megacorp-firee]

Mega, well sorta. If you don't have a house you don't need ins. but you'll still have a life. You may not feel you need LI but some folks would disagree.

In my case I still hold a Whole Life Policy for 500K. I've had it for 22 years and really don't need it at this point but if I cancel it I'd create a taxable event. At this point it mostly pays for itself and when I die DW or the kids would get 500K tax free. Also at some point I can cash it in and do a SIPA if I needed to. Not that I'm an annuity fan but it's an option. At 61 I'm still not sure what to do with it. No Male in my family has ever lived to the age of 70 so for the family sake I hold it, at least for now.

Agreed in your case, especially if you are no longer paying the premiums, however the OP was discussing term life ins.
IMO Whole Life policies are in the same class as annuities ... subject to much debate.
... hope you raise the curve on your family history.

 

[meierlde]

On Whole life policies if you stuck thru the 70s and 80s with a whole life policy (in particular one of the participating policies of the time) You find that now with the dividends you make money each year. The policies guaranteed cash value increase is about the cost of the premium and the dividends keep growing. In particular if you let it go to additional paid up insurance you could have 3 or 4x the face value in insurance.