Ask Terry Questions Term Life insurance at age 65

Term Life insurance at age 65

By Terry Savage on July 22, 2014 |

Hi, Terry. I enjoy and learn from your column and your visits to WGN Morning News. I will be 65 in a couple of months, am retired on a school teacher’s pension, and have a $250 term life policy that will greatly increase in cost to me at the end of this December. I have had it for 15 years. I rent but have some savings (about $130K) in IRAs. I would like to have something for my 24 year old daughter if I should die. I’m divorced and she would be my only beneficiary. I went online to SelectQuote and found out if I applied now I could get a 10 year term policy for $100K that would cost me about $54 ($14 more a month than I am paying now). My current policy will jump up to over $700/month. I will not be continuing with that one. Should I go for the new policy? Is that a good deal? They said if I wait until my 65th birthday the cost will $70/month instead of the $54/month if I were to lock in now. Or do you think I should just not have a life insurance policy and save myself the $54 (or $70) a month? I am currently in good health and my goal is to provide my daughter with something when i pass. If you think continuing with a policy is a good idea, is 10 years a long enough policy?

Terry Says:  Well, let’s look at the actuarial facts first.  If you reach age 65 and are healthy, the longevity tables predict you will reach a statistically average age of 83.   So you’re thinking of paying $54 a month for 12 months (10 years) for a total cost of $6480.  At the end of that time period, you will be left with nothing as the term policy expires because odds say you will be alive!  There are a lot of other things you could do with that money — from investing to purchasing a pre-paid funeral service so your passing won’t be a burden to your daughter.

So the real question is:  How lucky/healthy do you feel?  It’s scary to contemplate our own death– but it surely will happen to all of us.  The only question is ‘when”!

I have one more question for you:  How much did your parents leave to you?  I’m guessing it was nothing much.  And look how well you’ve managed your life.  Your daughter will inherit all the lessons your taught her about self-reliance and hard work.  Those are far more valuable than an insurance policy!  Just something to think about . . . .

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