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Post by cajeanne on Oct 20, 2017 18:05:55 GMT
DH has left this up to me.
Back story: We live in SoCal so you know what property values are like. We were fortunate to sell our home and reap the benefits.
So we have investment accounts worth about $700,000, another $500,000 in a 401K, our home is paid for (worth about $650,000) and another home that we rent out is paid for and worth about $500,000. DH worked very hard all his life and is finally able to retire and enjoy himself. We never took extravagant vacations and rarely bought new cars. It was all about saving for the future.
We are paying $177 a month for term life insurance for DH (age 71). It is for $400,000 and will expire in 4 years. I say there is no reason to keep this policy. If anything happens to him I will have more than enough to live comfortably for the rest of my life (I am 68.) We have one child who is mid-30's, has a good job and owns a home.
So what say the peas? Would it be foolish to cancel or better to save the $177 a month?
TIA!
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Sarah*H
Pearl Clutcher
Posts: 3,973 
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Post by Sarah*H on Oct 20, 2017 18:12:18 GMT
It's only $177 a month. It seems like you can afford so why not keep it? If the worst happens, he dies and you don't want the money, use it to set up an educational fund for future grandchildren or gift it to your own child for his/her retirement planning.
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Post by burningfeather on Oct 20, 2017 18:14:05 GMT
If your needs are going to be well met, then there's no need for life insurance. The intention is to provide for your loved ones after death and it sounds like he (and you) have done that well already. Your son does not sound like he would need any family support at this stage.
At most, I would look into prepaying funeral expenses, but even that isn't really necessary unless you absolutely know what you want and just want the task done (I was so grateful my dad had done that because it took the entire burden of decision making off of me at a time that I was least prepared to make decisions)
ETA: Or perhaps look into some long term care? That could easily eat through your savings and investments and life insurance wouldn't be a help in that situation anyway
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Post by katlady on Oct 20, 2017 18:15:36 GMT
Yes, I would drop it. You and your son are taken care of, there is no need for it.
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Post by scrapperal on Oct 20, 2017 18:24:41 GMT
One question is what happens to your retirement income if your DH were to pass in the next four years? If you need that income, then you may want to keep the life insurance.
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Post by ntsf on Oct 20, 2017 18:28:02 GMT
I would drop the insurance and invest that money
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River
Pearl Clutcher
Posts: 3,507
Location: Alabama
Jun 26, 2014 15:26:04 GMT
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Post by River on Oct 20, 2017 18:30:50 GMT
I'd keep it. Yes you are fine now if something happens to him (death), but what about if something horrible comes up like dementia or Alzheimer's where long term care could wipe out a good bit of your savings? My parents had worked hard to be set after retirement, they always thought ahead and had planned well. Then my dad was diagnosed with early onset Alzheimer's. He was only 55 years old. My mother had to start selling things to help pay for in home health care. She just couldn't bring herself to put him in full time nursing home. He lived for 10 years with each year worse than the last and needing more and more care. It almost wiped them out of their hard earned savings. Their house was also paid off and that helped a great deal. But if we'd put him in a home for Alzheimer's she may have had to sell the house they built board by board with their own hands.
Not only was the disease devastating to all of us, the financial hit was awful.
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java
Junior Member
Posts: 81
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Post by java on Oct 20, 2017 18:44:48 GMT
Basically without the life insurance you have 1.7m. I would not count the house unless you plan to sell it which probably would not be a great idea. I personally would use that 177 per month toward long term care insurance for both of you. The statistics point to the likelihood of it being needed. Medicare does not cover any assisted living costs and only up to 100 days in a benefit period for nursing home care and that is not a given. They have input into how long they will cover a stay. Medicaid covers assisted living however the asset rules are something I would suggest you become familiar with. The condensed version of the assets rules are he would not receive Medicaid and you could be left with very little...the house you live in, approximately 110,00 and the car. All other assets would have to be spent down before Medicaid. The look back period is five years so any asset sheltering should be looked into.
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janeinbama
Pearl Clutcher
Posts: 3,172
Location: Alabama
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Post by janeinbama on Oct 20, 2017 18:59:28 GMT
I would stop payments. Life insurance is a gamble and you son is grown. If DH is fairly healthy, the next 4 years should pass uneventfully and it would save you another $8500. We sold a couple of whole life policies when working with our Financial Planner - talk with your planner/adviser for insights on this policy and long term care insurance.
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milocat
Drama Llama
Posts: 5,421
Location: 55 degrees north in Alberta, Canada
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Post by milocat on Oct 20, 2017 19:07:54 GMT
Basically without the life insurance you have 1.7m. I would not count the house unless you plan to sell it which probably would not be a great idea. I personally would use that 177 per month toward long term care insurance for both of you. The statistics point to the likelihood of it being needed. Medicare does not cover any assisted living costs and only up to 100 days in a benefit period for nursing home care and that is not a given. They have input into how long they will cover a stay. Medicaid covers assisted living however the asset rules are something I would suggest you become familiar with. The condensed version of the assets rules are he would not receive Medicaid and you could be left with very little...the house you live in, approximately 110,00 and the car. All other assets would have to be spent down before Medicaid. The look back period is five years so any asset sheltering should be looked into. People often say what their house is worth but what does it really matter? Yes, it is good that you are living somewhere mortgage free. If you are living in your house that money is not accessible to you. Unless your house is worth a great deal of money and you can and will sell it and get into something a lot cheaper and pocket a nice amount of money then there is no point in counting the value of your home. |
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Post by cadoodlebug on Oct 20, 2017 19:13:16 GMT
Basically without the life insurance you have 1.7m. I would not count the house unless you plan to sell it which probably would not be a great idea. I personally would use that 177 per month toward long term care insurance for both of you. The statistics point to the likelihood of it being needed. Medicare does not cover any assisted living costs and only up to 100 days in a benefit period for nursing home care and that is not a given. They have input into how long they will cover a stay. Medicaid covers assisted living however the asset rules are something I would suggest you become familiar with. The condensed version of the assets rules are he would not receive Medicaid and you could be left with very little...the house you live in, approximately 110,00 and the car. All other assets would have to be spent down before Medicaid. The look back period is five years so any asset sheltering should be looked into. People often say what their house is worth but what does it really matter? Yes, it is good that you are living somewhere mortgage free. If you are living in your house that money is not accessible to you. Unless your house is worth a great deal of money and you can and will sell it and get into something a lot cheaper and pocket a nice amount of money then there is no point in counting the value of your home.I disagree with this statement. There are newer reverse mortgage programs where you can set it up and if the need arises down the road, you can access the money. I don't remember all the details but DH was telling me about this last year when a man who deals in these programs made a presentation at HD's office meeting. OP, I'm not sure what I would do in your shoes. Many variables to consider. |
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Peal
Pearl Clutcher
Posts: 2,524
Jun 25, 2014 22:45:40 GMT
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Post by Peal on Oct 20, 2017 19:14:47 GMT
LTC insurance at your ages may not be possible. The companies are very particular about issuing it. I was talking with my FA about it, he said it's the most popular product his clients ask about, with only a 30% approval rate. If you have any pre-exisitng conditions you are very likely to be turned down.
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Post by cajeanne on Oct 20, 2017 19:37:13 GMT
Thanks for all your replies, you have truly given me a lot to think about! DH's sister has LTC insurance and she said the premiums have sky rocketed the past few years.
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Deleted
Posts: 0
Apr 29, 2024 8:20:59 GMT
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Post by Deleted on Oct 20, 2017 23:01:50 GMT
I am a believer in insurance because you never know what will happen in life. One accident can take you out financially.
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Post by busy on Oct 20, 2017 23:08:27 GMT
Is there any income that will be lost when he passes away? If not, then I'd let the insurance lapse. You'll have marginally lower expenses as a single person with the same income, so if you're financially comfortable now, you wouldn't need the insurance proceeds.
If there *is* income that will be lost when he passes away, I'd hold on to the policy for the next four years, but I probably wouldn't renew it - though I would be sure to consult with a certified financial planner before making that decision.
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scrapngranny
Pearl Clutcher
Only slightly senile
Posts: 4,762
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Post by scrapngranny on Oct 20, 2017 23:12:12 GMT
Do you have a long term care policy? My dad had money in stocks and a savings account, when he needed to go into a nursing facility. The facility was $11,000 a month. I had to sell all of the stock and use that money plus his savings to pay for the nursing home. Once all of his money was gone Medicaid began paying for his care until he died.
I would consider canceling the life insurance and putting the money into a long term care policy, if you don’t have one.
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Post by auntkelly on Oct 20, 2017 23:33:03 GMT
I would definitely look into a long term care policy. My husband and I retired last year and we purchased long term care policies for both of us.
We got several different quotes from three different people. (Two financial advisors and an insurance agent). The premiums and benefits varied greatly. We ended up purchasing a policy through The Knights of Columbus (a Catholic men's organization to which my husband belongs).
We were told that so many people are turned down for long term care policies because they wait to apply for a policy until they begin to exhibit memory loss or have other very serious health issues.
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Post by lisae on Oct 20, 2017 23:41:48 GMT
Take a look at what your tax situation will be if he passed. If you have annuities as investments that have a lot of tax deferred earnings, eventually you will have to pay the income tax on those earnings. Life insurance can offset the taxes. If that isn't your situation, then I'd say to drop it.
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Deleted
Posts: 0
Apr 29, 2024 8:20:59 GMT
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Post by Deleted on Oct 21, 2017 0:13:30 GMT
Drop it, no real need for the policy.
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Post by hop2 on Oct 21, 2017 0:27:04 GMT
Another vote for long term care insurance
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