Any knowledge of life insurance here?

rz350

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My wife is 59 and is retiring April 1 of this year, she was looking at $300K term life policies and is waiting for a quote from a place recommended by several co-workers who retired from our company.

I will be retiring in July so I need the same advice? I'll be 57...


Any recommendations/advice/thoughts??


All input appreciated! :)
 

NoTeleBob

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Think about what you really need. The insurance amount should be what the other person (spouse in this case) needs to live on should the other person decease. Replacement of lost income. It's nice to think of your spouse getting a $1M check if you die, but it's a lot of cost you probably don't need. It also should not be thought of as an inheritance plan unless someone depends on you for support and you need to provide for that.

Policy cost will vary significantly based on health history. That's not consistent from company to company. If you have any health defects at all, it will come down to what a single person, the underwriter, decides about you. Shop around.

The tend to lure you in with "you could get this rate", then tell you that something in your history or health only qualifies you for a higher rate. So look around and have options.

Also, don't accept what an insurance company doctor tells you (if they send one to test you at home or send you to theirs to be tested). They have zero interest in reducing premiums and will often set rates based on some alleged defect that really isn't a health issue. Discuss and have tests redone by your own doctor. You can often set the company right and get a proper rate.

Keep in mind that once you get tested, that information has to be disclosed on the next application. In other words, if they test and say "Oh, you have an irregular EKG so you need to pay 3x as much"... you can't just go to another company and start over. Now you have to disclose that diagnosis if a doctor rendered it... or find a doctor of your own who says it's not an issue (and will write a letter why it isn't). The lever there is that doctors seem to get truly annoyed when insurance companies claim something is a health defect and they know it isn't, so they don't mind writing letters for you.
 

Telecasterless

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I think NoTeleBob pretty much nailed it.

Ask yourself why you need the insurance. I think it is primarily good for when say you are the breadwinner and your spouse may be a homemaker and you have children that you want to get through college. So you back into a dollar amount that say if you were to pass and the income would be lost for x number of years to raise the kids, or pay the mortgage, the insurance lump sum would get your loved ones through that period. I don't think it's generally intended to create a financial windfall.

Also as you might imagine, it gets significantly more expensive with age and length of term. I bought life insurance when I was in my forties and in very good health with the idea that if I were to pass, at least my wife could pay off the entire mortgage and have some money left over. That way, so long as she was employed, she could successfully raise my daughter comfortably without worrying about having a home to live in. My dad died when I was 8. I remember financial hardships as a child and although we lived in a nice neighborhood and I was never for want of food and clothing, my family did experience traumas of one form or another related to money and emotional suffering from abuses, etc. So my rationale for buying insurance was directly correlated to experiences that I never wanted someone I love to endure. So think about the reasons why and how much you think you need, because the premiums are not cheap.
 

Telecasterless

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My wife is 59 and is retiring April 1 of this year, she was looking at $300K term life policies and is waiting for a quote from a place recommended by several co-workers who retired from our company.

I will be retiring in July so I need the same advice? I'll be 57...


Any recommendations/advice/thoughts??


All input appreciated! :)

Incidentally, and it's none of my business, but retiring at 57 and 59 is sort of a luxury I would think. I mean, I'm 55 and I cannot afford to retire at least for another 10 years. I sort of feel like if someone can retire at 57 or 59, they pretty much must be already well off to last them through the rest of their life. In other words, I wouldn't retire at that age unless I had all the money I needed to see my way to say 90. Maybe longer. I don't know what the life insurance does for you guys at this point since if you will both be retired, you clearly plan on living off your savings (and what little SS you will get, if any at that age). And if one or the other passes, then expenses would be that much less.

So I am a little confused about the situation.
 

rz350

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Incidentally, and it's none of my business, but retiring at 57 and 59 is sort of a luxury I would think. I mean, I'm 55 and I cannot afford to retire at least for another 10 years. I sort of feel like if someone can retire at 57 or 59, they pretty much must be already well off to last them through the rest of their life. In other words, I wouldn't retire at that age unless I had all the money I needed to see my way to say 90. Maybe longer. I don't know what the life insurance does for you guys at this point since if you will both be retired, you clearly plan on living off your savings (and what little SS you will get, if any at that age). And if one or the other passes, then expenses would be that much less.

So I am a little confused about the situation.

Well, we've both been working at the same company since 1988, both have pensions and 401K's, my wife has had several hand surgeries and can't really do her job anymore (we work on industrial electronics/industrial assembly) , both of our pensions went up about 49% this year, I suspect they will decrease in the next year by a large percentage, I had two heart attacks in 2020 so my time is unknown....

I/she could take a lesser insurance amount, but until her and I start receiving social security payments, I just want to be sure we are covered.

I've dealt with several retirement planners and accountants who said we are fine, but I just like being sure, once I'm into retirement and receiving social security I will see the hard numbers myself, then I'll know, but that's 2.5 years out, I know that the life insurance amount quoted would make up for any shortages, I just have to see it for myself......

That's my story, I guess more research is required, but I always err on the caution side.
 

David C

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I suspect you may find that getting life insurance worth $300K is going to cost you quite a bit a month when you are in your 50s. But if you just google "life insurance pricing" you will get any number of responses. I would say that if you are going for a 10 year policy just about any of them would be the same in terms of what they are offering.

Not sure what pricing levels you are going to find, but if she has clean health, perhaps she can find a policy the two of you can live with.
 
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burntfrijoles

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Does your company offer life insurance past your employment date through COBRA? That could cover your for 18 months.

If your company has retirement health benefits beyond COBRA that would be great. Most do not. Otherwise you’re probably looking at some big dollar health insurance premiums.
Does your pension have survivor benefits.
Life insurance is a mixed bag.
Good luck!
 

Festofish

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I used to sell it. I quit because I didn’t believe in it. I worked for a very popular company and I just couldn’t get behind it.
Why term?
 

drf64

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I used to sell it. I quit because I didn’t believe in it. I worked for a very popular company and I just couldn’t get behind it.
Why term?

I'd be interested in your opinion. The only other option is whole life, correct? That would cost a lot more for the same amount of coverage. Whole life is something you buy for your children when they are born and by the time they are adults the dividends pay for it and keep growing.
 

Jaysmay

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With out knowing your exact finances its hard to give advice.

I'd tend listen closely to your accountant and financial advisors.

There can be a place for insurance in a financial plan.

I was a Wholesale Investment Broker mostly in mutual funds. I had term insurance until I had enough assets so my wife and children would be able go on without me. That is in the past and I no longer have life insurance.
 

stormsedge

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Retired at 55 here. One word--Term. Check Dave Ramsey's site for some recommendations.

Mrs hit a milestone age last year and her term life went up significantly (diabetic). I will hit an older milestone age this year (cancer and high bp). When these term life policies run out, we'll be self-insured.

Self-insured for us means zero debt including a home that is paid for...a no nonsense-working household budget, solid medical, solid emergency fund, sinking funds for vacations, maintenance and repairs, solid vehicles (with a backup sinking fund), and a revenue stream (if you wish to call it that) for Mrs to maintain a facsimile of her lifestyle should I go first (statistically likely). Many other factors...these are the biggies.

Best to discuss this openly and at length with your spouse---nothing is sacred and both parties should understand all the details of your retirement's fiscal underpinnings.
 
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Festofish

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Insurance is one of the biggest legal rackets out there
Totally. Paying for something you might need versus investing that money. I worked for a company that’s known for their baby plans. Those aren’t bad because you can get in super cheap for life if you don’t lapse. Personally having your final arrangements set and paid for is better. I think small personal loans are a great way to make money. Lending money to other people in the world through various entities. It’s illegal in MI but not all states. You make a percentage and you help people. Betting against Wall Street short seller scum is nice too.
 

Festofish

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Retired at 55 here. One word--Term. Check Dave Ramsey's site for some recommendations.

Mrs hit a milestone age last year and her term life went up significantly (diabetic). I will hit an older milestone age this year (cancer and high bp). When these term life policies run out, we'll be self-insured.

Self-insured for us means zero debt including a home that is paid for...a no nonsense-working household budget, solid medical, solid emergency fund, sinking funds for vacations, maintenance and repairs, solid vehicles (with a backup sinking fund), and a revenue stream (if you wish to call it that) for Mrs to maintain a facsimile of her lifestyle should I go first (statistically likely). Many other factors...these are the biggies.

Best to discuss this openly and at length with your spouse---nothing is sacred and both parties should understand all the underpinnings of your retirement's fiscal underpinnings.
Check more than Dave Ramsey please. He’s good but very opinionated.
 
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Festofish

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I'd be interested in your opinion. The only other option is whole life, correct? That would cost a lot more for the same amount of coverage. Whole life is something you buy for your children when they are born and by the time they are adults the dividends pay for it and keep growing.
Actually Term is meant for times when you/spouse needs it...young families need term should something happen to one breadwinner. The adults left behind won’t be able to just double their income if they can work at all with young kids. Once your kids are out of the house you wont need it should an earner pass unless you’re in another “term” of opening a business or any other thing that puts your income at risk. It’s been a couple years so I’m rusty. If you can afford one then go for it. I just don’t think it’s the first move for empty nesters and such. I was top of my team in service but sales are what mattered which is why I left. Just remember insurance agents are normal people that make money on commissions aka not your friend.
 

horsespatoot

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Bought a $250k 20 year term policy just before I turned 50. I was good health. Two years after I obtained that policy, I had to have surgery to remove a malignant melanoma. 18 years later I attempted to replace that soon to expire policy, and was immediately denied any coverage. I tried other Insurance companies and they wouldn’t insure me either. Insurance companies have access to and share your medical history. If one company denies you, most likely all will deny you. Left me without insurance and no love for the industry.
IMHO, Stay away from term policies. I would invest in an annuity policy. If you outlive the term, at least you’ll get some compensation back for investing in yourself. Out-live a Term policy, and you get bupkis. Not even a “Thank You” from the provider.
The Insurance businesses is pretty cold hearted. In your time of need, their focus is not on you, it’s on their bottom line.
 




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