Is shopping around for term life insurance worth it at this point?

Discussion in 'Budget Board' started by Frwinkley, Aug 9, 2018 at 8:02 PM.

  1. Frwinkley

    Frwinkley Mouseketeer

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    We are in our mid 50s, and only intend to keep this insurance until retirement (another 6-7 years). We are in good health, don't smoke, etc. Naturally, as we've aged, the cost has gone up significantly. We both have insurance through our employers, and have had this insurance for 25 years. We have no mortgage, only daughter is on her own and married, and have no other debt, except a car payment.

    Any advice?
     
  2. georgina

    georgina DIS Veteran

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    We dropped our life insurance completely once the kids left home for good. Mortgage is paid off, we feel comfortable with our retirement savings to carry us through. DH has a pension, we have a couple of indexed annuities which will provide extra income, and are delaying SS for several years. Everyone's situation is different, you need to look at your whole financial picture. How important is the possible life insurance benefit to you vs cost? What if one of you should die, how will that affect the other's financial stability?
     
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  4. Frwinkley

    Frwinkley Mouseketeer

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    I have every intention of dropping it once we are both retired. We're much more comfortable having it while we are still both working.
     
  5. BridgetBordeaux

    BridgetBordeaux DIS Veteran

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    It sounds like things are going well for you. If you have not talked to a financial planner at this point in your life, this may be a good time to do it. They can help you examine many facets of your finances and help determine what coverage, if any, that you need. If you can't access one through some sort of relationship you have via a finance institution, or your job, then most experts suggest using a flat fee based planner. That way, you will get truly unbiased advice since they have nothing to sell you and therefore earn extra commissions.
     
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  6. slpeters

    slpeters Mouseketeer

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    It sort of depends how your employer life insurance is structured. Ours is a group policy. Even at 47 I'm probably older than the average person in the pool and the pool is huge because the firm buys life insurance on all employees and then allows you to buy more if you would like. In such a circumstance in your 50s you would benefit even more from the pool than would I. But the fact that you say that it has increased substantially as you've aged leads me to believe that you may not be pooled--the pool should increase in cost with inflation and conceivably if the whole pool aged, which retirement etc. usually prevents, but shouldn't increase with your individual age. My initial thought was that because of the nature of risk pooling you likely won't do better than your employer plan but if your insurance really is getting more expensive because of age and you aren't pooled, shopping around is probably a good idea.
     
  7. tvguy

    tvguy Question anything the facts don't support.

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    Okay, I'm confused. You've had a term life insurance policy for 25 years and the premiums have gone up? Or is that your employer insurance?
    Term insurance is supposed to have the same premium for the term.
    We cut our policies from $500,000 each to $250,000 when our kids started college. That was 13 years ago. We got the policies 30 years ago, and we are 61 now. The premiums are small, so at this point won't be dropping them. We just bought a car that we plan to have paid off when we retired, so that $20,000 debt is our only debt. We did purchase long term car insurance 6 years ago, THAT is expensive.
    My mom bought a long term care policy with a life insurance component that was reduced by what ever they paid out in long term care expenses, but dropped all other live insurance.

    The real test for married couples is, what income (or retirement benefit ) would go away if one spouse passed away and does that income need to be replaced. Social security at the very least would be reduced. Some pensions allow you to choose an option to continue payments for the surviving spouses, others don't. But the deceased spouses pension and Social Security could go away, and that could impact the surviving spouses financial situation.
     
  8. amcnj

    amcnj DIS Veteran

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    I agree with the above posters who say it comes down to your financial picture. Is it the insurance through work whose cost you are now questioning? Some do increase as you age, in blocks of every five or ten years.

    Is the insurance through work needed to allow a surviving spouse to make it to retirement age comfortably? Or do you feel you have enough assets to allow this to happen without any work term? After retirement age, would the surviving spouse be able to live on any pensions, social security and savings (both tax deferred and non), and in the way they would like to? By that I mean not having to say sell the house in order to survive. Or do you possibly even need additional non work term too?

    You may have needed term in larger amounts when younger to allow the family to be able to continue as they were living, including paying off mortgages and any further college expenses. Then as college was done, kids went off on their own, mortgage paid off, and your own savings and retirement assets grew, you might find you need much less or none at all.
     
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  9. StephMK

    StephMK DIS Veteran

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    My term policy has gone up because it was a set term then went up each year after the "set term". I just shopped mine and at 48, I can save about $40 a month getting a new term policy from an education association. Costco also had a comparable quote. Thanks for posting OP because I had been meaning to look at this.

    It doesnt hurt to check if you want to keep it until at least retirement. Do you belong to anything that might offer a policy benefit?
     
  10. a1tinkfans

    a1tinkfans Spreading Some Pixie Dust Today!

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    Term is best bang for ur buck.. but too many variables not knowing your larger “financial pix”.
    Long term plan..Advisor is best imho.
     
  11. Frwinkley

    Frwinkley Mouseketeer

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    OP here: StephMK--my term policy went up exactly like yours. I got a new term policy yesterday for myself and my DH and saved $85 per month through the NEA (I am a teacher). We actually increased the coverage amount also. Premium is guaranteed not to increase and coverage will not decrease over the course of the term (10 Years). We could have chosen a longer term also. No medical exam required (although we are both in good health). Just authorization to release our medical records to the underwriter (insurance is underwritten by Prudential).
     
  12. StephMK

    StephMK DIS Veteran

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    Frwinkley- I'm a teacher too and went through NEA also! I get the mailers often but never really took the time to compare prices until your post. We have 5 years of college ahead of us, 3 years with 2 overlapping so I'm happy to save anywhere possible. Thanks again because I just assumed prices would only be higher.
     
  13. Frwinkley

    Frwinkley Mouseketeer

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    StepMK--I could kick myself for not doing it sooner!

    I might have to take a look at what they offer as far as auto and homeowners' insurance.

    Have a great school year!
     

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