Deleted
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Post by Deleted on Nov 24, 2019 22:44:16 GMT -5
I am 65. When I married DH ten years ago, he had sold his house and lived in an apartment. He wanted to be debt free. It was 2009, the peak of the recession. It didn't seem fair to stick him with a house that might be underwater. So I bought a 15-year $150,000 term policy for $28.66 a month from Genworth.
As you all know, he died last month. I owe $50,000 on the house. On a good day, I have $500,000 in retirement accounts. If I died in the next ten years, there is a residual balance (declining monthly) that underlies my pension.
Should I cancel the insurance? I have no reason to think I will die in the next 5 years unless I get hit by the proverbial bus. That would make it a windfall for my adult kids. But don't they have enough of a windfall?
$28.66 would make little difference to my budget, but I don't want to be a bad YMer.
What say ye?
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tskeeter
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Post by tskeeter on Nov 24, 2019 23:05:53 GMT -5
As an investment, for most people, life insurance sucks. Life insurance, as an investment, is most suitable for the very wealthy who want to transfer assets to heirs tax free.
Since you no longer need to protect a loved one financially, I think I’d cancel the insurance policy and spend the roughly $300 a year on fun stuff. After all, just two or three years of premiums on the insurance policy would pay for an off season plane ticket to Europe.
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Apple
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Post by Apple on Nov 24, 2019 23:39:28 GMT -5
I'm sorry you lost your husband I would not feel bad about losing the life insurance. You don't have someone relying on your income anymore, so it's no longer needed for its true purpose. I'm a ways from retirement, but when I no longer have my work life insurance, I will not have life insurance (my assets are enough to cover my expenses and leave my son a large windfall already.) The only pushback they could give me was "well, your other money is going to be taxed and *"there won't be much left" and take a while to get to your son, but he could have this life insurance money within a few weeks". *Really? He could pay 33% in taxes on my retirement and still have a large windfall, especially for a guy in his early 20s! The hard sell didn't work.
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Deleted
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Post by Deleted on Nov 24, 2019 23:43:11 GMT -5
I don't have more than my work supplied 1x salary life insurance because I don't have anyone that would need it if something happened to me.
If it were me in your shoes I would cancel it.
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Deleted
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Post by Deleted on Nov 25, 2019 0:04:26 GMT -5
I would drop it in a heartbeat if I was you. There is no reason to keep it.
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resolution
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Post by resolution on Nov 25, 2019 7:21:04 GMT -5
I would drop it. Every year our insurance guy tries to get us to buy life insurance, but so far the only reason he can come up with is to leave it as a bequest to our favorite charity.
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wvugurl26
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Post by wvugurl26 on Nov 25, 2019 7:49:56 GMT -5
I would definitely drop it. You had it for a specific purpose. You could better use the money for something else.
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swamp
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Post by swamp on Nov 25, 2019 9:19:25 GMT -5
I don't see a reason to keep it.
Prepay your funeral and drop the insurance.
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alabamagal
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Post by alabamagal on Nov 25, 2019 9:58:29 GMT -5
Well I usually recommend dropping extra insurance, but might want to keep it until term expires.
This is my thought on it. In 2009 you got a level term policy for 15 years. They based your premiums on the risk of your death over that 15 years, which would increase every year. So your initial premiums were higher than you would have for a yearly policy, while your end premiums are lower since you are in your last 5 years. I would consider keeping for the rest of the term and leaving money to your heirs, or even to a charity you care about. But would definitely not renew after 15 years.
But dropping it would also be an ok decision because you do not need it.
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mollyanna58
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Post by mollyanna58 on Nov 25, 2019 11:03:01 GMT -5
If you don't have any dependents, you don't need life insurance (which I say as a licensed insurance agent).
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Deleted
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Post by Deleted on Nov 25, 2019 11:23:59 GMT -5
I had life insurance through my employer and dropped it when I retired. It was mostly to protect DH if I went first but the assets got to the level that there would be enough to support him without it. In your case I'd drop it- I'm a big believer in making sure that the only monthly obligations I have are kept manageable and are only for things I want/use.
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Deleted
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Post by Deleted on Nov 25, 2019 11:44:23 GMT -5
If you don't have any dependents, you don't need life insurance (which I say as a licensed insurance agent). I HAVE dependents and don't really think I need it anymore. If I kicked over my kids would make out like bandits anyhow just splitting my retirement and the house sale proceeds.
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Tiny
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Post by Tiny on Nov 25, 2019 11:48:47 GMT -5
I would drop the insurance - it no longer serves the purpose for which it was purchased (and has an end date of sorts).
If you feel bad/uncomfortable about canceling the insurance (as it 'severs/ends a link' to your dear hubby or because the insurance is a reminder of something 'happy/fond/good feeling' to do with your dear hubby) why not find a different way to use the money you would spend on the insurance for the next 5 years (or some part of it) for a different kind of thing or experience or service as a remembrance of your dear hubby?
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NastyWoman
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Post by NastyWoman on Nov 25, 2019 16:28:16 GMT -5
Aside from the life insurance I have through work, I haven't had any for the last 15 or so years. Once DS2 was established I figured life insurance was no longer needed
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happyhoix
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Post by happyhoix on Nov 25, 2019 17:07:48 GMT -5
I had a 15 year term policy, they wanted to continue it at 3x the original rate, so I dropped it.
It's just me and Mr Happy, and he'll inherit my 401K and the house if I kick the bucket first. Plus while I continue to work I have insurance provided by my employer. Just didn't need it anymore.
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thyme4change
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Post by thyme4change on Nov 25, 2019 17:20:40 GMT -5
I had life insurance through my employer and dropped it when I retired. It was mostly to protect DH if I went first but the assets got to the level that there would be enough to support him without it. In your case I'd drop it- I'm a big believer in making sure that the only monthly obligations I have are kept manageable and are only for things I want/use. I have said that if they are greedy bitches my kids will hope that DH and I die suddenly when my son is 20-21. We got a 20 year policy when he was around 1 years old. I think it was 1/2 mill each. When it expires, I don't intend to replace it. If either of us dies, our assets will have to carry the other one through. If we both died suddenly, our kids would also get our entire estate and we won't be retired yet, but I may be getting close, so our funds will be sizable. We also have some life insurance via work. Maybe another 250 between us. I hope they don't Menendez Brothers us.
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zibazinski
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Post by zibazinski on Nov 25, 2019 19:06:36 GMT -5
I’ve prepaid everything but burning me up and shipping me to Michigan. My marker and putting me in the grave is paid for.
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Deleted
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Post by Deleted on Nov 25, 2019 21:15:29 GMT -5
I am going to cancel it tomorrow. As many of you have noted, the purpose is gone. It was meant to keep DH from getting stuck with an upside down house. Not only will that not happen because of his death, but the house is no longer upside down. And I see no reason why I should particularly be prone to dying in the next 5 years. Anything can happen, but longevity runs in my family. Sure, there are proverbial buses, but you can't prepare against everything.
It is just a reminder of how life has changed, which makes me so sad.
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Bluerobin
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Post by Bluerobin on Nov 26, 2019 16:48:35 GMT -5
Is there any cash value on the insurance? If so, cash it in. Crabby and I got rid of all our insurance, took the money and ran. Of course, we did save up enough to cover the final expenses.
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nidena
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Post by nidena on Nov 27, 2019 12:25:34 GMT -5
If you don't have any dependents, you don't need life insurance (which I say as a licensed insurance agent). This really caught my eye. I'm single, mid-40s, no dependents. My current life insurance is a $50,000 policy, for which I pay $35/mo. I have only that amount so that it covers cremation expenses and such. Does life insurance cover paying off a mortgage or could that be something that is taken care of with the settlement of my "estate" i.e. disbursement of my banking accounts and such?
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Deleted
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Post by Deleted on Nov 27, 2019 12:36:29 GMT -5
If you don't have any dependents, you don't need life insurance (which I say as a licensed insurance agent). This really caught my eye. I'm single, mid-40s, no dependents. My current life insurance is a $50,000 policy, for which I pay $35/mo. I have only that amount so that it covers cremation expenses and such. Does life insurance cover paying off a mortgage or could that be something that is taken care of with the settlement of my "estate" i.e. disbursement of my banking accounts and such? That is really, REALLY expensive life insurance! I pay less than that for 400K in life insurance. Is that a whole life policy?
The beneficiary can use the life insurance money for whatever they want, but if you're not leaving them your house having them pay off the mortgage with it is kind of pointless. The house will just be sold as part of your estate and the bank paid off. If you owe more than it's worth and have no other assets, the mortgage holder is just SOL.
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nidena
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Post by nidena on Nov 27, 2019 12:45:49 GMT -5
This really caught my eye. I'm single, mid-40s, no dependents. My current life insurance is a $50,000 policy, for which I pay $35/mo. I have only that amount so that it covers cremation expenses and such. Does life insurance cover paying off a mortgage or could that be something that is taken care of with the settlement of my "estate" i.e. disbursement of my banking accounts and such? That is really, REALLY expensive life insurance! I pay less than that for 400K in life insurance. Is that a whole life policy?
The beneficiary can use the life insurance money for whatever they want, but if you're not leaving them your house having them pay off the mortgage with it is kind of pointless. The house will just be sold as part of your estate and the bank paid off. If you owe more than it's worth and have no other assets, the mortgage holder is just SOL.
Looking at that account page, it says Universal. "This is a FLEXIBLE PREMIUM, ADJUSTABLE DEATH BENEFIT UNIVERSAL LIFE INSURANCE POLICY." The monthly minimum payment is only $15. It's current "cash value" is $1076. Contributions to date is $2340. Insurance is not my forte and I do remember reading about the different types and must have thought I was getting the "right" one at the time. Now, I'm not so sure. My dad is my beneficiary which no longer makes sense, nine years into the policy. I'm wondering, now, if it would just be better to save up a few thousand, earmarked for cremation.
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mollyanna58
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Post by mollyanna58 on Nov 27, 2019 13:20:36 GMT -5
That is really, REALLY expensive life insurance! I pay less than that for 400K in life insurance. Is that a whole life policy?
The beneficiary can use the life insurance money for whatever they want, but if you're not leaving them your house having them pay off the mortgage with it is kind of pointless. The house will just be sold as part of your estate and the bank paid off. If you owe more than it's worth and have no other assets, the mortgage holder is just SOL.
Looking at that account page, it says Universal. "This is a FLEXIBLE PREMIUM, ADJUSTABLE DEATH BENEFIT UNIVERSAL LIFE INSURANCE POLICY." The monthly minimum payment is only $15. It's current "cash value" is $1076. Contributions to date is $2340. Insurance is not my forte and I do remember reading about the different types and must have thought I was getting the "right" one at the time. Now, I'm not so sure. My dad is my beneficiary which no longer makes sense, nine years into the policy. I'm wondering, now, if it would just be better to save up a few thousand, earmarked for cremation. I don't specialize in life insurance, but I have never liked universal life policies. They combine an investment vehicle with a life insurance policy, and I have never been impressed with the investment portion. Personally, I would just put the money aside, or prepay with a funeral home.
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Tiny
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Post by Tiny on Nov 27, 2019 13:58:09 GMT -5
I found this - talks about the disadvantages: budgeting.thenest.com/disadvantages-getting-universal-life-insurance-30796.htmlThe thing I have heard most about is having to pay bigger and bigger premiums to keep the policy active.... especially when you are old and don't have a job or way to increase your income (to keep up with the increasing cost of the insurance). see the Lapse Potential part of the linked article. Generally, "life insurance" is to protect your dependents in case of your untimely death. If you don't have dependents - you most likely don't need life insurance. I'm single and the youngest in my family (by a lot of years) I suspect I won't have much close family around when I kick the bucket. I do have alot of assets but there's no gaurentee I'll have $$ when I die (should I need alot of care for a long time at the end). My plan is to eventually pre-pay/buy my final resting place and other final expenses. I'm staying away form the continueing expense of life insurance that would be used to pay for my funeral/etc.
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laterbloomer
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Post by laterbloomer on Nov 27, 2019 15:14:24 GMT -5
Give your kids the option of taking over the payments.
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TheOtherMe
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Post by TheOtherMe on Nov 27, 2019 15:42:25 GMT -5
That is really, REALLY expensive life insurance! I pay less than that for 400K in life insurance. Is that a whole life policy?
The beneficiary can use the life insurance money for whatever they want, but if you're not leaving them your house having them pay off the mortgage with it is kind of pointless. The house will just be sold as part of your estate and the bank paid off. If you owe more than it's worth and have no other assets, the mortgage holder is just SOL.
Looking at that account page, it says Universal. "This is a FLEXIBLE PREMIUM, ADJUSTABLE DEATH BENEFIT UNIVERSAL LIFE INSURANCE POLICY." The monthly minimum payment is only $15. It's current "cash value" is $1076. Contributions to date is $2340. Insurance is not my forte and I do remember reading about the different types and must have thought I was getting the "right" one at the time. Now, I'm not so sure. My dad is my beneficiary which no longer makes sense, nine years into the policy. I'm wondering, now, if it would just be better to save up a few thousand, earmarked for cremation. I am currently pre paying for my cremation at $32 per month. One more year and it's paid for.
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nidena
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Post by nidena on Dec 4, 2019 16:53:47 GMT -5
I found this - talks about the disadvantages: budgeting.thenest.com/disadvantages-getting-universal-life-insurance-30796.htmlThe thing I have heard most about is having to pay bigger and bigger premiums to keep the policy active.... especially when you are old and don't have a job or way to increase your income (to keep up with the increasing cost of the insurance). see the Lapse Potential part of the linked article. Generally, "life insurance" is to protect your dependents in case of your untimely death. If you don't have dependents - you most likely don't need life insurance. I'm single and the youngest in my family (by a lot of years) I suspect I won't have much close family around when I kick the bucket. I do have alot of assets but there's no gaurentee I'll have $$ when I die (should I need alot of care for a long time at the end). My plan is to eventually pre-pay/buy my final resting place and other final expenses. I'm staying away form the continueing expense of life insurance that would be used to pay for my funeral/etc. I went ahead and canx'd the policy and am having them put the Cash Value amount into my 3-6 Months savings account which, when added to what's already in there, puts me 1/3 of the way to that $ goal.
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kittensaver
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Post by kittensaver on Dec 4, 2019 21:33:55 GMT -5
Nancy - I'm so sorry for your loss I get it I'm cancelling mine. My mother is 96 and will undoubtedly go before me, I too have no spouse/recently died (the policy was for him), no children, his parents are long gone - - so why do I need to keep making payments? So some second-tier relative (as much as I love them ) gets a bonus payout? I think not . . . I'm going to cash it out, take the money and travel. But as always, YMMV
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