Life insurance term ends
Both my husband and I are 58 and retired, on good pensions. Our home, valued at over $440,000 will be paid off in about 6-7 years & have over $800,000 in IRA’s
We were asked to change our term life insurance ($220,000 policy each- which I do want to lower the monthly cost) to a universal policy. Not sure I like these policies- for pretty much same monthly cost it’s $50,000 or $75,000 each but ends at age 90…was told we need a blood test & health test for another term 10 or 20 yr (lot less monthly) but then after that life insurance is hard to get…is that true? We are both on some meds, so is that another reason we would be denied for another term policy & would have to go with this universal policy? Told universal pays interest/something like that, until a certain age, but it just seems like a lot of money for a small policy
Terry Says
First big question: Do you still NEED the life insurance?? Who would benefit from it? Each of you, if the other spouse dies? Your children or grandchildren??
If the answer is that you have “enough” money, then WHEN THE POLICY MATURES at the end of the term, you can just let it expire. That’s the sensible thing to do –and not look back!
Term policies are designed to cover a specific number of years, typically until a mortgage is paid off or college costs are covered. Conversions to a universal life policy typically result in much higher premiums — either up front or a dramatic increase in a few years (while the salesperson gets a commission from the conversion)! Not recommended unless you are already terminally ill and truly will need the proceeds in the near future.
Let me add one more bit of unsolicited advice. You each retired at 58. And you still have a mortgage. That’s likely just way too early!! Go to www.NewRetirement.com, and do the math there. Unless you have HUGE retirement savings (in which case you definitely don’t need life insurance) or have a HUGE and inflation-adjusted income stream, you’re likely to run out of money before you run out of life!
Do this planning now, while you have time to go back to work (perhaps at a different job!) and while jobs are still available.
