Stop paying on life insurance policy?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Hogan773
Posts: 370
Joined: Thu May 07, 2015 11:14 am

Stop paying on life insurance policy?

Post by Hogan773 » Sat Nov 10, 2018 5:17 pm

About 15yrs ago I got a 500K 20yr term policy. It is relatively cheap ($280 per year level premiums)

I have been fortunate with job and living within my means

Today I have assets (invested 65/35 in equity and bond index funds) of mid to high 7 figures, plus a house that has a mortgage of about $200k. No other debt. In addition to the above I have savings set aside for kids college.

I was sitting down to log in to pay my annual premium, and then I sort of just thought "if I die tomorrow, will that extra $500K really change in any material way the amount of resources that would pass on to my family?"

Yes, I know that saving $280 per year will also not move any needles on my net worth.


Would you guys say that this is "cheap insurance" so just keep paying it, at least through the next 5 years and then see if they start jacking up the rate, or would you consider just stopping paying now given that I don't "need" this insurance to pass along?

Big Dog
Posts: 882
Joined: Mon Sep 07, 2015 4:12 pm

Re: Stop paying on life insurance policy?

Post by Big Dog » Sat Nov 10, 2018 5:20 pm

I'd keep paying it until the end of 20 years and then reassess the need for life insurance. If something does happen to you, the insurance easily pays off the mortgage and the rest goes to your heirs.

RickBoglehead
Posts: 972
Joined: Wed Feb 14, 2018 9:10 am

Re: Stop paying on life insurance policy?

Post by RickBoglehead » Sat Nov 10, 2018 5:21 pm

At 20 years they are simply going to end the policy.

I would stop paying it.

Silk McCue
Posts: 1324
Joined: Thu Feb 25, 2016 7:11 pm

Re: Stop paying on life insurance policy?

Post by Silk McCue » Sat Nov 10, 2018 5:30 pm

This is dirt cheap insurance. I would keep it.

Your post actually doesn’t provide enough information for me to know your surviving family members needs or financial earnings capabilities. Age of spouse, if any, and their earnings capability, age of kids, what exactly mid to high seven figures means to you ( different people interpret this differently) etc.


Cheers

Hogan773
Posts: 370
Joined: Thu May 07, 2015 11:14 am

Re: Stop paying on life insurance policy?

Post by Hogan773 » Sat Nov 10, 2018 5:37 pm

Silk McCue wrote:
Sat Nov 10, 2018 5:30 pm
This is dirt cheap insurance. I would keep it.

Your post actually doesn’t provide enough information for me to know your surviving family members needs or financial earnings capabilities. Age of spouse, if any, and their earnings capability, age of kids, what exactly mid to high seven figures means to you ( different people interpret this differently) etc.


Cheers
Yes true

3 kids, ages 8 to 15. Wife works in a professional job and makes ~140. I've already socked away college money for at least the first two kids in 529s.

The answers above are interesting and sort of what was in my head too. On the one hand, it is super cheap insurance for $500K policy, but on the other hand I don't really "need" it today. But then again saving a bit less than $300 doesn't change me financially.

Hogan773
Posts: 370
Joined: Thu May 07, 2015 11:14 am

Re: Stop paying on life insurance policy?

Post by Hogan773 » Sat Nov 10, 2018 5:44 pm

RickBoglehead wrote:
Sat Nov 10, 2018 5:21 pm
At 20 years they are simply going to end the policy.

I would stop paying it.
Interestingly the website shows "paid up" to 2066, and "expires" in 2066 as well. I assume that means that after the first 20 years they would jack up my rate and then let me keep paying an ever-increasing premium if I chose to? (rather than just cancel the policy at 20yrs as you suggest?)

User avatar
celia
Posts: 8482
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Stop paying on life insurance policy?

Post by celia » Sat Nov 10, 2018 5:49 pm

Keep the cheap insurance. Let your wife know that she can use it to pay taxes on Roth conversions in the same year you die. (Please don't die in late December). This is because she will have to file as Single (or Head of Household) starting the year after you die. The space in each tax bracket is half as much for Singles as it is for Marrieds. So she should do that Roth conversion while she has the money and the Married status. $280 a year to do Roth conversions will seem like a very good deal.

Of course, this assumes you will die while still insured. If you outlive the insurance policy, that is even better!


P.S. If you die in late December, she can still do the Roth conversions even if she doesn't get the payout until the next year. But she will either have to get your death certificate and send it in to the custodian to have the account re-titled to her first or, if she has Agent Authorization and you are on your deathbed, she can convert under your name. So this (December death) takes a little bit of discussion and advanced planning.

bigcmagor
Posts: 54
Joined: Tue Aug 14, 2012 4:06 pm

Re: Stop paying on life insurance policy?

Post by bigcmagor » Sat Nov 10, 2018 6:04 pm

I had a 20 year level premium policy @ $280 per year too. When the term expired, I was offered a ten year renewal @ $3,600 per year. That was the end of life insurance coverage for me, and I'm not as well prepared as you.

I would also recommend keeping the policy until it expires. It's currently a very good value.

User avatar
BL
Posts: 8369
Joined: Sun Mar 01, 2009 2:28 pm

Re: Stop paying on life insurance policy?

Post by BL » Sat Nov 10, 2018 6:05 pm

A surviving spouse can file as Qualifying Widow/er for 2 years if she has dependent children.

User avatar
Artful Dodger
Posts: 480
Joined: Thu Oct 20, 2016 12:56 pm

Re: Stop paying on life insurance policy?

Post by Artful Dodger » Sat Nov 10, 2018 8:58 pm

What do you think?

1) this is "cheap insurance" so just keep paying it, at least through the next 5 years

(and then see if they start jacking up the rate) This they will definitely do, so you're really just deciding for the next five years.

2) consider just stopping paying now given that I don't "need" this insurance to pass along?

Mid to high 7 figures. So that's like 5 million plus. If you die, do you want your wife to have an additional $500k?

MP173
Posts: 1926
Joined: Fri Dec 07, 2007 6:03 pm

Re: Stop paying on life insurance policy?

Post by MP173 » Sun Nov 11, 2018 12:35 pm

At that cost I would recommend keeping the policy.

Yes, you are doing quite well, but this is a cheap risk hedge.

Do you know when you are going to die? Of course not.

Do you know what your net worth will be in five years? Probably not.

The policy is $.66 per day.

Ed

kevinpet
Posts: 49
Joined: Fri Jan 13, 2012 1:27 pm
Location: CA
Contact:

Re: Stop paying on life insurance policy?

Post by kevinpet » Sun Nov 11, 2018 12:56 pm

Assuming you are 45, your probability of the insurance paying out is 1 - ((1 - 0.31%) * (1 - 0.33%) * (1 - 0.37%) * (1 - 0.49%) * (1 - 0.45%)) = 1.9%, giving the life insurance over the next few years an expected value of $9500, for an expected return on investment of about 750%.

If you want to calculate using your actual age, I got these numbers from https://www.ssa.gov/oact/STATS/table4c6.html

Term life insurance with a fixed premium over some number of years is priced such that the early years pay for the profit and additional death probability in the later years.

inbox788
Posts: 5655
Joined: Thu Mar 15, 2012 5:24 pm

Re: Stop paying on life insurance policy?

Post by inbox788 » Sun Nov 11, 2018 2:15 pm

Silk McCue wrote:
Sat Nov 10, 2018 5:30 pm
This is dirt cheap insurance. I would keep it.
I wouldn't call $280/500k or $560/1M dirt cheap. It would depend on risk factors, but it might be a good bet.
Gender: Female
November 11th, 2018
Birthdate: June 15th, 1978
Health Class: Preferred Plus Non-Smoker
Actual Age: 40
Amount of Insurance: $1,000,000


5 Year Level Term EMC National Life Company
Super Preferred Non-Tobacco P+ Term Select - 5 Year
$350.00 /yr or $31.15 /mo

Preferred Non-Tobacco Pf Term Select - 5 Year
$470.00 /yr or $41.83 /mo

Standard Select Non-Tobacco R+ Term Select - 5 Year
$630.00 /yr or $56.07 /mo
https://www.term4sale.com
kevinpet wrote:
Sun Nov 11, 2018 12:56 pm
Assuming you are 45, your probability of the insurance paying out is 1 - ((1 - 0.31%) * (1 - 0.33%) * (1 - 0.37%) * (1 - 0.49%) * (1 - 0.45%)) = 1.9%, giving the life insurance over the next few years an expected value of $9500, for an expected return on investment of about 750%.

If you want to calculate using your actual age, I got these numbers from https://www.ssa.gov/oact/STATS/table4c6.html

Term life insurance with a fixed premium over some number of years is priced such that the early years pay for the profit and additional death probability in the later years.
Those are pretty good odds, but the utility function has changed and thus alters your personal value. At age 30, the expected value and ROI was less than 100%, but your utility make it a good value. Today, the utility is low, so the value calculation is less than 15 years ago. It's reached the point of diminishing returns. Do you want to eat 5 more chocolate chip cookies after you've eaten 15 of them, even if they're cheaper than the first ones?

Since this is a one time bet, I'd take the 98% chance of not "winning" it.
Last edited by inbox788 on Sun Nov 11, 2018 2:29 pm, edited 2 times in total.

Nissanzx1
Posts: 304
Joined: Wed Jul 18, 2018 11:13 pm

Re: Stop paying on life insurance policy?

Post by Nissanzx1 » Sun Nov 11, 2018 2:26 pm

If your mortgaged, I'd personally keep the term life.

Good job saving so far.

CedarWaxWing
Posts: 629
Joined: Sun Nov 02, 2014 12:24 pm

Re: Stop paying on life insurance policy?

Post by CedarWaxWing » Sun Nov 11, 2018 2:32 pm

Considering your young age, and the children's young ages, the costs of raising and educating children, and the difficulty of managing a demanding work life as a single parent, and your ability to pay the premiums, I would keep the term until it expires, and would consider buying more term at this time to cover all of your wife's expected living expenses until the kids are educated and on their own. A single mom (or dad) may well not wish to work full time, and or may be unable, or not wanting, to work for unexpected reasons at anytime. If a large policy on each parent is not a hardship, I would think it would actually greatly increase peace of mind if either of you should pass away.

My situation was similar to yours in a way. We both worked, in a relatively high paying profession, but different in that we each worked part time until my wife decided to be a stay at home mom, at which time I went FT. (more than FT in my line of work.)

This is what we did:

We are what I consider to be super savers. We live modest but very sufficient lifestyles in comparison to our work peers.

(We always maxed out our 401ks, iras, and put a lot into taxable mutuals also.)

We made an assumption that it would take no more than 500 K to raise our 3 boys and educate them, and that either spouse could work 1/2 time if necessary to supplement income and savings, and that child care part time would be affordable and available.

We had 3 children, about 22 months apart at my age of 39, 38 for mom.

At age 42 we bought life insurance in the following fashion:

Male spouse age 42: WL 500, 000 K Level premium.
Term 1,000,000 Premium adjusted every year.

Female spouse age 42: WL 250,000 K Level premium.

(WL: I did not understand why this was not a great idea, as I was less financially savvy in those days. We still have the WLs because they are very much in the black at this time, and the dividends have been about 6% per year. We would have sig taxable income if we cashed them in at this time, and the premiums do not affect our ability to make ends meet.)

Term insurance was dropped when it was only a few years before my expected retirement, and the college costs were covered by other funds/taxable investments. At that time the Term costs were rising rapidly. We could have retired comfortably by that time without changing our lifestyles.

Have fun deciding.... sorry if this is more info than you wanted to see.

Silk McCue
Posts: 1324
Joined: Thu Feb 25, 2016 7:11 pm

Re: Stop paying on life insurance policy?

Post by Silk McCue » Sun Nov 11, 2018 2:34 pm

inbox788 wrote:
Sun Nov 11, 2018 2:15 pm
Silk McCue wrote:
Sat Nov 10, 2018 5:30 pm
This is dirt cheap insurance. I would keep it.
I wouldn't call $280/500k or $560/1M dirt cheap. It would depend on risk factors, but it might be a good bet.
This is what I call straining at gnats.

BTW - the OP is a male. Your quotes are female and for twice his coverage. EMC National is $285 for Super preferred male for $500k for 5 years, Preferred male is $325.

No matter how you cut it $280 a year is dirt cheap even without these comparisons.

Cheers

MikeG62
Posts: 1172
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Stop paying on life insurance policy?

Post by MikeG62 » Sun Nov 11, 2018 2:42 pm

Hogan773 wrote:
Sat Nov 10, 2018 5:17 pm

...Today I have assets (invested 65/35 in equity and bond index funds) of mid to high 7 figures, plus a house that has a mortgage of about $200k. No other debt. In addition to the above I have savings set aside for kids college.

I was sitting down to log in to pay my annual premium, and then I sort of just thought "if I die tomorrow, will that extra $500K really change in any material way the amount of resources that would pass on to my family?"
OP, I went through a similar analysis back when I turned 50. My annual premium on a similar sized policy doubled when I reached that age and I thought as you did "does my wife need this money should I predecease her". We decided that it would have no impact on her lifestyle either way and so we choose not to renew my policy. We kept my wife's in place a few years longer (hers was for a lesser amount and considerably cheaper). About two years ago when it was renewal time we decided to let her policy lapse as well.

After all, life insurance is really there to replace the paycheck of the insured. If one does not need income replacement, it would seem one does therefore not need life insurance.

Your policy is quite cheap so it's no big deal either way.
Real Knowledge Comes Only From Experience

inbox788
Posts: 5655
Joined: Thu Mar 15, 2012 5:24 pm

Re: Stop paying on life insurance policy?

Post by inbox788 » Sun Nov 11, 2018 3:11 pm

Silk McCue wrote:
Sun Nov 11, 2018 2:34 pm
inbox788 wrote:
Sun Nov 11, 2018 2:15 pm
Silk McCue wrote:
Sat Nov 10, 2018 5:30 pm
This is dirt cheap insurance. I would keep it.
I wouldn't call $280/500k or $560/1M dirt cheap. It would depend on risk factors, but it might be a good bet.
This is what I call straining at gnats.

BTW - the OP is a male. Your quotes are female and for twice his coverage. EMC National is $285 for Super preferred male for $500k for 5 years, Preferred male is $325.

No matter how you cut it $280 a year is dirt cheap even without these comparisons.

Cheers
What age is OP? Isn't "$285 for Super preferred male for $500k for 5 years" close to what OP has? Those are market rates. We may just be dealing with different reference points. Some people consider all fair priced term life insurance to be cheap or even dirt cheap. IMO, market rates aren't cheap, they're market rates, so in my mind, cheap is below market rates (or better returns/odds) and dirt cheap has an even lower bar (greater value).

A $1 lottery ticket can win a million or a billion dollars. Would you call it cheap or dirt cheap? And if they offered BOGO to everyone that it make it any cheaper? Are items at the dollar store cheap or dirt cheap or does it depend on the specific item?

The insurance companies have it all figured out, I don' t think there is any surplus to capitalize on.

OP, given how little your heirs need it, and the tiny chances it pays off, the best course of action is to cancel it, but inertia and laziness can be powerful forces. Fortunately, it will terminate in 5 years if you keep doing what your doing, and like other have mentioned it's no big deal either way.

There more to gain with good estate planning.
kevinpet wrote:
Sun Nov 11, 2018 12:56 pm
Assuming you are 45, your probability of the insurance paying out is 1 - ((1 - 0.31%) * (1 - 0.33%) * (1 - 0.37%) * (1 - 0.49%) * (1 - 0.45%)) = 1.9%, giving the life insurance over the next few years an expected value of $9500, for an expected return on investment of about 750%.

If you want to calculate using your actual age, I got these numbers from https://www.ssa.gov/oact/STATS/table4c6.html
I like these comparisons, but I gave it another thought, and I believe the statistics are total population. If you look at sub-populations and risk factors, the odds change dramatically. I would expect OP to be in a far lower risk category than the typical 1.9% middle age mortality. Presumably he's working, and not at a high risk job (trucker, welder, logger, police/fire, etc.), doesn't skydive or free climb, and wasn't institutionalized/hospitalized long term. If you look at just the insured pool, I wouldn't be surprised if the risk was an order of magnitude lower, so the expected ROI might be more or less than 100%, a fair bet, but not one that OP needs to take.

User avatar
Smorgasbord
Posts: 371
Joined: Fri Jun 10, 2016 8:12 pm

Re: Stop paying on life insurance policy?

Post by Smorgasbord » Sun Nov 11, 2018 5:08 pm

My answer would be that it depends. Based solely on need, with a mid-to-high seven figure portfolio, if you are spending less than $300k per year I'd probably ditch the insurance. However with that portfolio you are probably getting close to the point where there are inheritance tax benefits to keeping the insurance so you might want to talk to an estate planner before cancelling.

Hogan773
Posts: 370
Joined: Thu May 07, 2015 11:14 am

Re: Stop paying on life insurance policy?

Post by Hogan773 » Sun Nov 11, 2018 8:07 pm

inbox788 wrote:
Sun Nov 11, 2018 3:11 pm


I like these comparisons, but I gave it another thought, and I believe the statistics are total population. If you look at sub-populations and risk factors, the odds change dramatically. I would expect OP to be in a far lower risk category than the typical 1.9% middle age mortality. Presumably he's working, and not at a high risk job (trucker, welder, logger, police/fire, etc.), doesn't skydive or free climb, and wasn't institutionalized/hospitalized long term. If you look at just the insured pool, I wouldn't be surprised if the risk was an order of magnitude lower, so the expected ROI might be more or less than 100%, a fair bet, but not one that OP needs to take.
THANKS!

I gotta say the earlier post was really bumming me out! I know it is "only 2%" but to think there was a 2% chance I will die in the next 5 years was a buzzkill!

I think I will just pay it for now and think about it again.

You guys make some good points that I need to investigate, like sitting with an estate planner. We have a will but it is almost 14 years old and really should be updated. We did it when our first kid was a baby. Certainly our financial assets have grown in 14yrs and we now have 3 kids (the will anticipated multiple kids in the drafting though) and tax laws are different now too.

I am very much a DIYer on finances (DIY through Vanguard) so any suggestions on best value in updating a will? Attorney I assume? Local person or are there online people who can do it? Is there like a TurboTax of will writing? (I assume you will tell me not to use just a software program though)

Silk McCue
Posts: 1324
Joined: Thu Feb 25, 2016 7:11 pm

Re: Stop paying on life insurance policy?

Post by Silk McCue » Sun Nov 11, 2018 9:04 pm

No DIY for your will or estate planning documents for your asset level. Hire competent professionals to protect your wife and children.

Cheers.

Hogan773
Posts: 370
Joined: Thu May 07, 2015 11:14 am

Re: Stop paying on life insurance policy?

Post by Hogan773 » Mon Nov 12, 2018 9:53 am

Silk McCue wrote:
Sun Nov 11, 2018 9:04 pm
No DIY for your will or estate planning documents for your asset level. Hire competent professionals to protect your wife and children.

Cheers.
What should I be looking for? An estate planning attorney? A "Certified Financial Planner"? I really don't want someone who is going to want to manage my assets and I don't need the sales pitch. I would like sort of a rifle shot consultation, recommendation and will drafting.

Ben Mathew
Posts: 127
Joined: Tue Mar 13, 2018 11:41 am
Location: Seattle
Contact:

Re: Stop paying on life insurance policy?

Post by Ben Mathew » Mon Nov 12, 2018 10:27 am

kevinpet wrote:
Sun Nov 11, 2018 12:56 pm
Term life insurance with a fixed premium over some number of years is priced such that the early years pay for the profit and additional death probability in the later years.
Agree with this. It's a shame to pay the expensive early years of a level term policy and give up the cheap late years. Price out a new policy at term4sale and see how your current rate compares. If your current rate is significantly lower, you might be getting better than fair odds. If so, you shouldn't cancel regardless of your net worth (as long as you have heirs you want to leave the money to).

User avatar
greg24
Posts: 3271
Joined: Tue Feb 20, 2007 10:34 am

Re: Stop paying on life insurance policy?

Post by greg24 » Mon Nov 12, 2018 10:54 am

Given the ROI, I'd keep it.

You also mentioned not being fully funded for college. One more reason.

ncbill
Posts: 361
Joined: Sun Jul 06, 2008 4:03 pm

Re: Stop paying on life insurance policy?

Post by ncbill » Mon Nov 12, 2018 1:19 pm

Ben Mathew wrote:
Mon Nov 12, 2018 10:27 am
kevinpet wrote:
Sun Nov 11, 2018 12:56 pm
Term life insurance with a fixed premium over some number of years is priced such that the early years pay for the profit and additional death probability in the later years.
Agree with this. It's a shame to pay the expensive early years of a level term policy and give up the cheap late years. Price out a new policy at term4sale and see how your current rate compares. If your current rate is significantly lower, you might be getting better than fair odds. If so, you shouldn't cancel regardless of your net worth (as long as you have heirs you want to leave the money to).
Another important consideration is that in general 15 years later one's health will not be as good as it was when the policy is issued.

One may think they are in great shape, only to be offered preferred or standard after the medical exam, so there's no reasonable basis for other posters to be quoting "super-preferred" rates.

The OP's current policy absolutely should be kept until expiration.

flarf
Posts: 12
Joined: Tue Sep 25, 2018 2:05 pm

Re: Stop paying on life insurance policy?

Post by flarf » Mon Nov 12, 2018 1:29 pm

I'd say keep it just because it would make things easier for your family. Your spouse and children won't have to worry about making any investment decisions for a long time; they'll be able to process everything at a pace that makes them comfortable while financial matters remain largely on autopilot.

I'm in a similar boat and keep paying premiums for that reason alone.

Separately, you need a trusts and estates attorney to help with your estate planning. Find somebody local.

MrsBDG
Posts: 92
Joined: Thu Apr 13, 2017 4:04 pm

Re: Stop paying on life insurance policy?

Post by MrsBDG » Mon Nov 12, 2018 2:24 pm

I have a similar $249 $500k policy, I will keep it until the end of the 20 years, just one more premium, because, God forbid I get some dread disease or in a fatal accident, it's just such cheap insurance which will provide immediate and easy liquidity. My portfolio has RE that should not be liquidated in a bad market, it also has assorted market investments, both bond and equity, each of which also I would prefer no one liquidate at a bad time in the market. The immediate cash will be helpful at my demise.

Hogan773
Posts: 370
Joined: Thu May 07, 2015 11:14 am

Re: Stop paying on life insurance policy?

Post by Hogan773 » Mon Nov 12, 2018 3:59 pm

Ben Mathew wrote:
Mon Nov 12, 2018 10:27 am
kevinpet wrote:
Sun Nov 11, 2018 12:56 pm
Term life insurance with a fixed premium over some number of years is priced such that the early years pay for the profit and additional death probability in the later years.
Agree with this. It's a shame to pay the expensive early years of a level term policy and give up the cheap late years. Price out a new policy at term4sale and see how your current rate compares. If your current rate is significantly lower, you might be getting better than fair odds. If so, you shouldn't cancel regardless of your net worth (as long as you have heirs you want to leave the money to).
Interesting point....I guess these last 5 years are the "best value" part of the 20yr policy I bought, so I should keep it

User avatar
wabbajack
Posts: 236
Joined: Sun Mar 25, 2018 8:05 pm
Location: Indianapolis

Re: Stop paying on life insurance policy?

Post by wabbajack » Mon Nov 12, 2018 4:15 pm

Hogan773 wrote:
Sat Nov 10, 2018 5:37 pm
On the one hand, it is super cheap insurance for $500K policy, but on the other hand I don't really "need" it today.
Consider that the reason the insurance is so cheap is because the actuaries have figured that the probability of payout is also similarly low.
flarf wrote:
Mon Nov 12, 2018 1:29 pm
I'd say keep it just because it would make things easier for your family. Your spouse and children won't have to worry about making any investment decisions for a long time; they'll be able to process everything at a pace that makes them comfortable while financial matters remain largely on autopilot.
+1

Hogan773
Posts: 370
Joined: Thu May 07, 2015 11:14 am

Re: Stop paying on life insurance policy?

Post by Hogan773 » Mon Nov 12, 2018 4:17 pm

wabbajack wrote:
Mon Nov 12, 2018 4:15 pm
Hogan773 wrote:
Sat Nov 10, 2018 5:37 pm
On the one hand, it is super cheap insurance for $500K policy, but on the other hand I don't really "need" it today.
Consider that the reason the insurance is so cheap is because the actuaries have figured that the probability of payout is also similarly low.



+1

I like that! I don't want those odds to be high!

Greenman72
Posts: 154
Joined: Fri Nov 01, 2013 2:17 pm

Re: Stop paying on life insurance policy?

Post by Greenman72 » Mon Nov 12, 2018 8:20 pm

@OP - if you didn’t spend the $23/month on life insurance, what would you spend it on?

Hogan773
Posts: 370
Joined: Thu May 07, 2015 11:14 am

Re: Stop paying on life insurance policy?

Post by Hogan773 » Mon Nov 12, 2018 11:20 pm

Greenman72 wrote:
Mon Nov 12, 2018 8:20 pm
@OP - if you didn’t spend the $23/month on life insurance, what would you spend it on?
I would save it

I already am a net saver every month so I don't think I would increase my spending by $23 a month with this newfound windfall of savings

User avatar
celia
Posts: 8482
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Stop paying on life insurance policy?

Post by celia » Mon Nov 12, 2018 11:39 pm

Hogan773 wrote:
Sun Nov 11, 2018 8:07 pm
I gotta say the earlier post was really bumming me out! I know it is "only 2%" but to think there was a 2% chance I will die in the next 5 years was a buzzkill!
Another way of saying this is that there is a 98% chance you will live at least 5 more years. Does that sound better?

traineeinvestor
Posts: 501
Joined: Wed Nov 26, 2008 8:52 am
Location: Hong Kong
Contact:

Re: Stop paying on life insurance policy?

Post by traineeinvestor » Tue Nov 13, 2018 2:32 am

I cancelled my life insurance when I retired on the basis that if there is enough money to support myself + family in retirement then there is more than enough to support the family without me.

It helps that there is no estate duty where I live and my wife is financially astute and able to manage the family finances without me.

We did carry a mortgage into retirement but, after discussion, decided that we did not need life insurance to pay off the balance – my wife was comfortable with servicing the remaining balance from our investments.

Once the policy had served its purpose, the premiums were just wasted money.

Post Reply