Life insurance over 60? (55, pension, supplement, spouse)

[orngkat]

This topic came up in my recent post and made me curious how many over 60 here still carry life insurance policies? Ours recently lapsed and now I am having second thoughts about renewing it since to do so does not require EOI if done within the next month. IF something happened to either of us, the one surviving could get by on current assets but a small value policy would certainly help. Thoughts?

[choff5]

Originally Posted by orngkat

This topic came up in my recent post and made me curious how many over 60 here still carry life insurance policies? Ours recently lapsed and now I am having second thoughts about renewing it since to do so does not require EOI if done within the next month. IF something happened to either of us, the one surviving could get by on current assets but a small value policy would certainly help. Thoughts?

As all things, depends on your situation. For us I took out life insurance at 60 because I was the one with a pension, not my DH. We weighed the options of reducing my pension and taking survivors benefits and the difference was such the life insurance annual premium was less than I was losing if I took survivor benefits.

[BayAreaHillbilly]

By the time I'm 60 the goal is to have been mortgage free for a few years. Assuming one has and can maintain an emergency fund, in addition to an allocated portfolio, life insurance may have a very low ROI. Once one reaches a certain point, so long as the death expenses are already covered by an emergency fund / liquid assets, then what point is there of having life insurance?

[LookingatFL]

We have life insurance on my husband. Having been widowed once already, I am a strong advocate of it. It isn't just a matter of having a mortgage or not. It is a matter of losing your spouse's income and being in a situation where expenses do not drop that much or actually increase. People don't realize that housing costs won't decrease that much, income taxes may actually increase when filing single, about the only real expense that will decrease is food. That could be offset by the people you have to hire to get things done that your spouse used to do or hiring help when you are ill and need help. Also, funerals and nursing home care can be very expensive.

I will repeat what I tell people all the time. Insurance is for economic protection. There is no ROI on insurance. When you buy homeowners insurance you don't want an ROI because that would mean your house was destroyed. When you buy auto insurance you don't want an ROI because that means your car was destroyed. Insurance is making sure you have the money you need at a time of devastation in your life.... much better to have it and never need it.

If you want an ROI get an investment.

[marcopolo]

Oh, if the VP in charge of spending predeceases me, the cost of living will definitely go down. So I do not have any insurance on her.

But my work as part-time caregiver to her would be expensive to replace, so I do carry life insurance on me. Everyone needs to look at their own situation.

[RiverBird]

You will be rejected if you don't pass the health Q and exam. In our case, DH's 30-yr term policy is up in 2017. Since he's in perfect health (and was found to be so in the exam) and will likely outlive me, we were going to drop his policy and get another one for far less benefit and thus far less annual premium, for 10 or 15 yrs. Surprise, he was rejected twice because he does not see a doctor regularly, by choice.

[nicet4]

Originally Posted by orngkat

This topic came up in my recent post and made me curious how many over 60 here still carry life insurance policies? Ours recently lapsed and now I am having second thoughts about renewing it since to do so does not require EOI if done within the next month. IF something happened to either of us, the one surviving could get by on current assets but a small value policy would certainly help. Thoughts?

Here is what I did and my thinking behind it.

I'm 66 and decided to purchase a whole life policy just last December through a fraternal organization, that has been around for more than 125 years, I am a member of.

If I had more money saved I wouldn't have bought and to make up for my past sin of not saving as much as I should have, along with a lot of other things, I decided to work to age 70 and then draw social security benefits. The difference between working to 66 and 70 is $800/month so I am banking on that four years, a little over 3 now, making up some sin.

If something happened to me now my wife would receive my full benefit of around $2,280 when she hits her full retirement age next year. That, along with a small state pension, a pension that will WEP savage her ss benefit, would give her around $2,500/month left over after she pays medicare and her medicare supplement. To me this isn't enough... what if I have a heart attack tonight?

So I purchased two policies; a term and whole life. It's costing me a lot of money but it allows me to sleep at night too.

I ended up selecting the $50,000 whole life and my premium is $280/month.



The organization has been in business for 125 years and all during that time they have never missed paying the non-guaranteed value even 80 years ago in the midst of the great depression.

$280/month for 10 years = $33,600 in premiums but in 10 years the guaranteed cash value is $14,555 and the non-guaranteed cash value is $17,883.

Using the guaranteed cash value to offset my premium payments I end up with an actual cost of $159/month which isn't bad for a 66 year old man. If I use the non-guaranteed cash value my actual cost is would end up being $131 which is a pretty good rate.

If I keep it for 15 years the non-guaranteed value is $33,478 which lowers my actual premium cost to $94 for the protection during that time.

Ok, to everyone who listens to Dave Ramsey, I know whole life is not any kind of great investment, in fact from a purely financial standpoint it stinks, but I wanted some protection for the RIGHT HERE AND RIGHT NOW. I think about what would happen to my wife is anything happens to me over the next 4 years and I am unable to work to provide that additional $800/month in monthly benefits?

I can purchase the insurance right now but at age 66 there is NO guarantee I can purchase a policy next year should I feel I need it.

I purchased some additional term as well only because what term policy I currently have expires in 2 years and 3 months and I can purchase it right now.

I feel real good, if something did happen to me tonight my wife would be very, very well taken care of in a financial sense.

[StealthRabbit]

Plan A...
I will keep 'term' to cover any debt / loss of income.

Most of debt is on income props, but it can take a long time to settle an estate and maybe longer to liquidate RE assets.

The Term policy buys some time to accomplish that.

[nicet4]

Originally Posted by StealthRabbit

Plan A...
I will keep 'term' to cover any debt / loss of income.

Most of debt is on income props, but it can take a long time to settle and estate and maybe longer to liquidate RE assets.

The Term policy buys some time to accomplish that.

Kind of how I view it.

If I was certain I would be able to work to 70 I wouldn't have insurance but the insurance I have insures her the additional $800/month for the rest of her life should something happen to me tomorrow.

In two years a rather large chunk of term insurance will evaporate but if I can work two more years she'll be more than half way to the additional $800 so all I need is enough to insure $400/month for the rest of her life.

At 70 I will feel I will have met my obligations at which time I will most likely drop the term insurance and most likely cut my whole life by half because we won't need it other than to take care of my funeral expenses.

[texdav]

you only buy insurance to hedge risk. The risk heer is when the insured is gone ;the consequences to the survivor. Very individual.