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Your opinion on life insurance purchase?

jackio

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My husband is 62 and uninsurable due to a cardiac history. He has had a term life insurance policy for $100K for 10 years at a super low premium (he was in excellent health when he purchased it). Now we are looking at increasing premiums - still reasonable for the next 5 years (under $100/month) but with large increases ahead, to a total of $432/month between 75 and 80. The policy ends at age 80.
His health is very good now that he has had his heart valve replaced.
Our insurance agent has advised us to convert this policy. He offered us a couple of options. One is a set premium of $122/mo for 15 years that ends at age 78.
The 2nd is a set premium of $185/month until the age of 90.
My gut tells me he will outlive the 15 year term.
We just don't know if it is worth $2200 a year for the longer policy. We can afford the premium, but to tell you the truth if I am in my 80's, I won't have much use for $100K. I guess we will be gambling that he will pass prior to his turning 90.
We can buy the insurance as an investment in inheritance for the children, but over the term (if he does not pass away) we will be spending about $60K to get a $100K return over 28 years.
Any thoughts on this are appreciated. The financial people we have spoken to all have products they would like to sell us, so it has been hard to get an objective opinion.
 

billymach4

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I wish for you and your husband to live to age 120.
If my wish does not come true and for some unforeseen reason your husband passes away in 5 years will you be able to afford to live independently mortgage free with minimal expenses.?
If you have been prudent and manage your finances you should not need life insurance when you get older. life insurance is a product much like a timeshare it needs to be sold.

If you were in your twenties and just purchased a home and your husband was the primary breadwinner and had a large mortgage that I would say life insurance is necessary.

my guess is that you are not in that situation any longer and life insurance is not required.

I hope that helps.
 

bizaro86

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If you don't need it (mortgage paid off, savings, etc) I would definitely cancel within the next few years (probably at an increase). Invest what you were paying in premiums to provide an inheritance for your children, or an additional buffer for yourselves.
 

bluehende

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I would say the basic question is whether you need the insurance. My gut feeling is stay with the term until it gets overly expensive. The insurance company is better than you at the statistics so unless there is a good reason to think he will die early carrying insurance is likely to be a loser.
 

Talent312

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IMHO...
You only need LI for debts and living expenses not otherwise covered.

When I go, DW will get my pension and IRA's. She will lose my SS, but...
Inheriting each other's IRA's will make up for losing the other's SS-$$.
So you might say that we're self-insured.

We have a couple of small LI policies just to cover death-related expenses...
So there'd be no financial loss on that score.
.
 
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WinniWoman

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My husband's term life insurance and long term disability policies end when he turns 65 April 2019. We don't yet know the cost of continuing them, but right now we are not planning to renew them.

Premiums will probably be outrageous. (he had a $500,000 life policy).
 
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Iggyearl

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As a very young married man, back in the 70's, I sold life insurance. The mantra then was that life insurance was designed to "create an estate," or "conserve an estate." If you don't have a lot of debt, the insurance won't solve any real problems. If your estate is not all in real estate, you are pretty liquid. (think farmers). If you have raised your kids to be self-sufficient, then they should not need any money on your husband's death. Can you survive without the insurance money? If you can, then you don't really NEED it. The fact of the matter is that (when I was selling) the conversion of a term policy to a permanent policy was a commission-able event. In other words, the agent MAY have a large interest in the conversion. I had a fair amount of term insurance when I was young - but the need is gone. I just have a burial policy now.

And please, never consider life insurance as an "investment" for your children. They should be on their own......... You should be taking care of yourself.
 
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WinniWoman

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I put aside some money 2 CD's and labelled them -"Funeral".
 

wackymother

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I would certainly keep the policy you have while it's cheap--for the next five years. Then re-evaluate. Honestly, I'm a little insurance-happy, so I personally would keep going.
 

CO skier

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One is a set premium of $122/mo for 15 years that ends at age 78.
The 2nd is a set premium of $185/month until the age of 90.
My gut tells me he will outlive the 15 year term.
We just don't know if it is worth $2200 a year for the longer policy. We can afford the premium, but to tell you the truth if I am in my 80's, I won't have much use for $100K. I guess we will be gambling that he will pass prior to his turning 90.
We can buy the insurance as an investment in inheritance for the children, but over the term (if he does not pass away) we will be spending about $60K to get a $100K return over 28 years.
Any thoughts on this are appreciated.
I think you answered your own question, and there is no need for life insurance on your husband from this moment onward. Life insurance companies look at actuarial tables; you and your husband know your personal situation and how it may differ from the actuarial tables.

The current policy is reasonably priced at $100/month, but that is still $6,000 over the next 5 years. Your choice (based on your assessment of your personal situation) to pay the premiums or cancel the policy now and put the $100/month into savings and 5 years from now take the $6,000 and you and your husband do something memorable with your children. Then put what would have been the $122/month into savings and every few years take that money and you and your husband do something memorable with your children.

You appear to be in an enviable situation where you can choose to spend your money on life insurance premiums, or spend the same money on living life with the ones you love. From what you posted, and since you are asking for thoughts, I would vote for the latter.
 

pedro47

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Sound liked your insurance agent only cares about one thing making commission (money) For Himself.
 
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VacationForever

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I bought two deferred income annuities that also act as insurance for my beneficiaries. If I die, they continue to get paid.
 

bogey21

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I like the $185 per month for the coverage to age 90 if (and it is a big if) paying the premium doesn't negatively impact your way of living. The way I look at it is that getting to 90 (I am 84) is a victory...

George
 

Passepartout

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Jackio, one other thing to throw into the mix. If your children are financially secure, and you have the assets to take care of 'final expenses', nobody is dependent on the life insurance. It's done what it was intended to do- give you and your husband peace of mind that future generations lifestyles would not be upset by his (your?) passing. Cancel- or just don't renew when the current policy matures. But if you and he want to leave a legacy, and can afford the premiums, Life insurance passes to the beneficiary tax free. It can be a very effective way to transfer wealth between generations if you are fortunate enough to be subject to inheritance tax. Of course inheritance tax is now only levied on very large estates.

Jim
 

cp73

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It really comes down to if you need the money if he was to pass away. Can you survive without it? I might just keep it in place for the next 5 years (unless you dont need it) with the low premium and then terminate it. Put those future premiums aside and save them. Your agents goal is to sell you life insurance.
 

Panina

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I like the $185 per month for the coverage to age 90 if (and it is a big if) paying the premium doesn't negatively impact your way of living. The way I look at it is that getting to 90 (I am 84) is a victory...

George
When you get to 90 I am going to have tuggers Birthday celebration for you :thumbup:
 

easyrider

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We bought whole life insurance along time ago. The policy was originally to protect the house and help with the kids. It also should have had a surrender value projection much higher than the reality of these last 40 years.

Because the surrender value isn't near as high as the death benefit, we decided to keep them, or at least keep mine. As Jim mentioned, the death benefit has zero tax liability and after all this time of having these policies, it just seems better to keep them.

Bill
 

easyrider

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My husband is 62 and uninsurable due to a cardiac history.
We can buy the insurance as an investment in inheritance for the children, but over the term (if he does not pass away) we will be spending about $60K to get a $100K return over 28 years.
Any thoughts on this are appreciated. The financial people we have spoken to all have products they would like to sell us, so it has been hard to get an objective opinion.

I know others that have kept their policies until they were to re-new and asked their kids if they wanted the policies enough to pay the premiums.

Bill
 

isisdave

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My thoughts, as we're about to evaluate a similar situation.

First, you don't say what kind of policy you're being offered conversion to. This matters. Does it have a cash value that grows, or is it just another term policy?

Second, you don't mention the age, number, or health of the kids, but $100k isn't going to go very far in fifteen years, especially if there's more than one. Tell them now, if they're old enough, not to expect an inheritance.

Third, the purpose of life insurance is to replace income. Is your husband employed? Does his employer offer life insurance, and if so do they pay for any of it? If you can get group life from an employer, it'll be cheaper than he can find on his own, I would guess, with the health concerns.

Fourth, what about your retirement budget? Here's something I never see considered: DW and I have recently retired, and the smaller of our two SS benefits is about $1750 a month. That's about a house payment, and the house is not paid off, nor will it be in our lifetimes. When either of you dies, the survivor will get the larger of your two SS payments, but the other will stop ... how does your budget look in that case? $100,000 would cover a $1750/month income reduction for less than five years.

For what it's worth: at age 62, male life expectancy is 20 more years, which means that half will live longer than that.

Summary: definitely keep the policy for now and re-evaluate at next premium increase. Sign up for more at work if possible. If you think you need more, have a different agent make a proposal. Ask if there's any way to mitigate the pre-existing condition. Is there a policy that would exclude ONLY heart problems? In fact, I would look into accidental death coverage, which would probably be the likely cause of death other than medical reasons. It's cheap, usually renewable until age 70 or 80, and I don't think your health matters.
 

bizaro86

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For what it's worth: at age 62, male life expectancy is 20 more years, which means that half will live longer than that.

I don't know your source for this fact, but I sort of doubt that it does in fact mean that half live longer than that.

If that life expectancy of 20 years is a 'mean' average, it isn't necessarily true (or even likely, imo) that the 'median' life span is the same.

Of course, maybe that is a median, in which case you're completely correct.
 

vacationhopeful

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I decided as a single person, a life insurance policy leaves money to the relatives.

I did a few years ago decided to buy a LONGTERM CARE INSURANCE policy .. that at least means I truly won't have to hope my relatives will remember to cook and clean for me ... or that I still have enough money to provide home care for me.

My auntie is 93 this year ... she lives in a 2bdr apt (not an assisted living place) ... with locally hired 'day' help for cooking, shopping, bathing and dressing. Or as I refer to her as, "Last Man Standing" on this side of the family. I get to watch her family home built in 1702 ... I give tours to the local police (responding to the alarm system going off) and our relatives. At this time of the year, my chore is to keep the furance running (with scheduling oil deliveries).
 

jackio

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Thank you all for your truly thoughtful perspectives. We are in the enviable position in that our house is paid (we sold and downsized last year) and we both have pensions. I will collect social security and DH unfortunately will not because he is collecting a federal pension and is affected by the offset penalty. I have a whole life policy purchased in my 30's that will go to him if I died first. If all goes as expected, I will not need his life insurance payout. Now the decision is if we want to gamble that he will go prior to turning 90, and leave the $100K to the kids.
 
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