Any knowledge of life insurance here?

[Newbcaster]

I run an investment firm and tax practice. We need to know a lot more than you are telling us.

Life insurance is a total racket, generally speaking, but that doesnt mean that it is useless.

Whole life policies are infinitely better than term, all things considered. But term may suit you.

I need to know a great deal more to advise.

I let my licenses lapse so I don't sell insurance. Feel free to reach out via email.
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I can tell you unequivocally what to buy from a fiduciary perspective e.g. no dog in this hunt.

It's free and I offer said advice freely with no sales pitch.

I've benefited alot from TDPRI and it's my way to give back.

 

[Harry Styron]

Buying life insurance when you’re in your mid-to-late 50s generally doesn’t make sense unless you or your spouse would be unable to make a mortgage payment if the other died or if you have business debt which the survivor would be liable for.

Whole life makes some sense for young people as a very conservative savings vehicle. The whole life policy that I bought in my mid-20s would have been great now that I’m 68, with fully paid premiums and dividends buying additional coverage or adding to cash value. But I cashed it in long ago to get money to buy a house.

It is far more likely that you or your spouse will become disabled—rather than die— before retirement, which is why disability and long-term care insurance is costly. You and your advisor need to examine this contingency.

 

[jimd]

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.

Exactly what he said! If you have enough money to retire, what is the life insurance for? In my situation, I bought enough term life insurance to get my wife through the time until her retirement age. Since she would inherit my retirement savings, I assumed that would cover her expenses beyond her retirement age.

 

[fjblair]

Life insurance is for young couples with kids, not as a prize for the surviving spouse when you die of old age.

 

[stormsedge]

Just say "no" to annuities. They are not an "investment" and only really pay the insurance company...the "why" for insurance salesmen selling them so hard. Buy term and invest the difference yourself in mutual funds you can manage.

 

[JL_LI]

My wife’s an agent. She’s not licensed in Wisconsin but she’s always been willing to answer questions and give suggestions to members. PM me if you would like to be put in touch.

 

[1 21 gigawatts]

I tend to be skeptical of insurance. Insurance companies are in business to make money after all. If you are both retiring, I'm not seeing a reason for life insurance. What income are you replacing? If you have the funds needed to justify retirement, you don't need life insurance.

 

[Cpb2020]

I have 2 term life insurance policies, one that lasts until I’m 58 and the kids are out of college, and the other that lasts until I’m around 65 or so. In essence, 2 phases, as we’ll need more $ until 58, less $ thereafter. We’ll be “self-insured” from 65 on. Then maybe we’ll need long term care insurance, but I have yet to cross that bridge.

I dug in pretty deeply into the various life insurance policies available after having kids, and I personally view it as only there for the purpose of replacing “income” I otherwise would have brought in. Not as a retirement or inheritance vehicle. Thus, based on how I view life insurance, I wouldn’t get a policy if I was entering retirement.

Not only do the costs of obtaining a policy go up significantly as you age, but if you have certain conditions you may not be considered insurable by many companies.

 

[Andy B]

We carried life insurance when we were younger. Enough to pay off the mortgage and burial expenses. Both policies lapsed in our mid 60's. House was paid off, no debt which meant to us we no longer needed them.

 

[Harry Styron]

For people in businesses with partners and business debt, life insurance is often required by lenders and can also be used to fund the buyout of heirs in case of a partner's death. While I'm happy with my business partner, I'd hate to be in business with her husband, who knows nothing about what we do.

To buy or not buy life insurance is sometimes a complicated question. Life insurance is sometimes an essential component of a business succession plan as well as a personal estate plan.

 

[ellielo]

I think the insurance company will need your wife's medical history and if she doesn't have major health issues it is all good. We had a life insurance with American income life insurance company for around 8 years and never had to use it. Here are some review about them on pissed consumer - https://american-income-life.pissedconsumer.com/review.html. The monthly payment was ok, all the rest - i don't know. At the moment we are traveling and decided that travel insurance makes more sense for us.
If i would be you, i would probably check few different companies, give them a call, ask about all the conditions and make my choice. It is always a good idea to have an alternative.

 

[boris bubbanov]

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!

Life insurance, with today's tax code and all the rest of it, makes very little sense in general. The possible exception would be a younger, one breadwinner family with fine salary/compensation and a passel of kids who all need to get through school and college and post grad. Back up that younger person's possible lost income, maybe. Everything else, is just bad math. Although, IF you already got hooked into life insurance policies, these crooks who want to buy them from you (or want to break an annuity you're in), they'll just rip you off a second time. So, don't buy any, but if you have it already, hang onto it.

By the way, that one breadwinner person? Might want to look into a policy that will pay a large sum IF that person were to become disabled or otherwise unable to do that high paying activity. Insure your line of income, let everything else take care of itself.

 

[sax4blues]

Like insurance threads on a guitar forum are a little below Class A vs Class A/B threads. Lots of valid opinions which contradict each other, and very little agreement on data.

I have some life insurance.

 

[rz350]

I don't have any life insurance since I retired in July, but I ain't worried... I'll be cremated and my ashes will be spread on the Bonneville salt flats at 300 MPH.

My wife has a very small policy, but is rethinking it now, it costs a stupid amount just to be buried and have a service, she's going to cancel and do something else...

I told her to just sell all of my equipment, I'll be dead so my playing skills will even be worse than now....

 

[Bob M]

Find a good financial planner. Listen to him. Everyone has different financial needs and goals. Some good advice here, but you need to sit down with someone who will help you piece together your situation.

 

[Jim_in_PA]

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.

I retired at age 60...because I could and it's been good for my health. Doing the right thing all those years relative to retirement savings, etc., paid off. I'm certainly not "well off" but I'm comfortable with the income I have available. I will mention, however, that the one barrier to early retirement, even when you have enough savings to do so, is health care coverage. Professor Dr. SWMBO is still employed so I didn't have to worry about that. If that were not the case, I would have been forced to continue working full time just to have affordable health care benefits.

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OP, relative to life insurance, there are two reasons to have it. (maybe three if you intend to be charitable with it, but that's a different conversation) The first is so-called "last expenses"...the cost of passing away including funeral and pre-death care costs not covered by healthcare arrangements, etc. The second is income replacement. So what you choose needs to be based on those things. The former is the long term need; the latter can vary, depending on where you are in life. If you are still working and/or have multiple dependents, the income replacement number necessarily will be larger to provide for living expenses, education expenses, etc., should you pass away and not be able to provide the same from your normal income. Later in life, there is still a need for income replacement, but it often is a lower number if "only" a spouse is involved. Even if you are both only getting income from social security, should you pass away, your spouse will only get the larger of the two SSI payments going forward, so income replacement may be necessary for them to be able to maintain their household without you being around.

I bought two larger term policies roughly ten years apart. The older one will cease in a few years which is fine because both daughters are out of the house; the younger just graduated from college this past spring. The newer one will hang around longer because it's newer (both were 20 year contracts) and provide coverage should the unexpected happen. The older one was certainly less expensive by a margin because I was much younger when it was purchased, so younger is a good time to consider setting things up for cost reasons. (I use AAA for my insurance needs)