Ask Terry Questions Additional life insurance needed?

Additional life insurance needed?

By Terry Savage on September 24, 2014 | Insurance & Annuities

Hi, my husband retired recently from his job at AT&T with basic life insurance of $50K. I have basic life thru my job with Loyola of $100K. I am currently paying with AARP life for an additional $50K $54 a month but when i turn 60 years old in a couple years, my premium will go up to $86 a month for the same $50K. I am thinking about switching to what Lifequotes has give me for $100K additional coverage @$62K month. Of course, if I were to switch I’d lose out the approximate $700 I’ve already paid with AARP. Wonder wonder I should do- if that additional insurance coverage is even necessary. What do you think?

Terry Says:  So your last question is the most significant one:  Why do you need ANY life insurance?  Could your husband live without your pension (if it stops at your death)?  Is he the beneficiary of any other retirement plans, such as a 403b) plan?   Are you worried about paying off a remaining mortgage balance?  Putting younger childfren through college?  Leaving anything to your adult children?  These are the questions you must answer first — what are the “needs” and “wants” that this life insurance is designed to fill.

Then you have to get a realistic assessment of what more insurance would cost.  Your health situation may have changed, making you a higher risk.  Are both plans comparable — or does one or the other end after 10 or 20 years?  You must compare apples to apples!  Yes, it is less expensive to buy a larger sum — but be sure you have the new policy before dumping an older one.  And be aware that the insurance company can contest the new policy if you die within two years of issuance. So it might be wise to keep BOTH for at least that long.

Finally, ask yourself what else you might do with the money you would be spending in premiums.  Maybe it’s time to enjoy living, as long as there are no greater needs for death benefits!



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