Life Insurance as an investment option
My wife and I are both 72, with about $4M in IRAs. We have 3 married daughters and 7 grandchildren, and would like to leave to them as much as possible. We’ve heard that a large life insurance policy is a good option for this. Can you please explain how this works, and the pros and cons of this strategy? Thank you very much!
Terry Says
At your ages, life insurance would be VERY expensive — and you might not qualify based on health! The person telling you this is a good strategy is probably a life insurance salesman!
Concentrate on maximizing your retirement savings, and leaving them what’s left over. The big calamity that could come along to devastate your retirement savings is the need for long-term care. In that case, you might consider a combo policy that provides long term care and life insurance if the money is not spent on care. But it requires a large cash deposit and that might limit your options for spending in retirement. You can read this column about that possibility.
https://www.terrysavage.com/long-term-care-insurance-a-creative-way-to-pay/
PS the BEST legacy you can leave your grandchildren is the time you spend with them, teaching them about life and your values.
