Life Insurance

Kim Lucky Day

Well-Known Member
Gold Supporting Member
Joined
Aug 22, 2018
Messages
471
Reaction score
1,262
Wondering your thoughts on the subject... When I was in my early 20's, I decided to start my own contracting business and took out a 15 year term life insurance policy. I chose term because it was all I could really afford at the time. After closing up shop 8 years later and getting "a real job", I renewed/upgraded that policy to a 30 year term.

I am a few years away from that term expiring. The notion of renewing a term policy is not appealing because of my age, in that after 5 years, the monthly premiums are going to begin to balloon to where this will be not only unaffordable but financially foolish. I could convert all or part of this to a cash value policy but I'd still expect to pay several hundred dollars a month for a relatively low payout.

This got me thinking that perhaps life insurance is a dying thing (pun intended). How much further ahead would I be to stick the money I'd devote to trying to play catch up into a Roth IRA or my employer 401(k)... Seems like a much wiser decision. Either way, my wife will get the dough from a retirement account or a life insurance policy...

What am I overlooking here, if anything? I know there's the whole "replacement income" thing as far as how much life insurance you should have. My wife has a very good job and I doubt she would need to rely on whatever she would get from this, except maybe to pay off any debt I might still have, which would be minor (probably a balance with my Sweetwater account lol).

No, I'm not dying or anything like that. I've just recently turned 50 and have had a run in with a (thankfully) minor case of cancer, I have borderline high blood pressure... and all of this just make one start to think that the bottom of the hill is closer than I'd like to admit.

I'd appreciate your thoughts on the matter!
 

pedecamp

Well-Known Member
Joined
Dec 7, 2009
Messages
18,991
Reaction score
20,426
Wondering your thoughts on the subject... When I was in my early 20's, I decided to start my own contracting business and took out a 15 year term life insurance policy. I chose term because it was all I could really afford at the time. After closing up shop 8 years later and getting "a real job", I renewed/upgraded that policy to a 30 year term.

I am a few years away from that term expiring. The notion of renewing a term policy is not appealing because of my age, in that after 5 years, the monthly premiums are going to begin to balloon to where this will be not only unaffordable but financially foolish. I could convert all or part of this to a cash value policy but I'd still expect to pay several hundred dollars a month for a relatively low payout.

This got me thinking that perhaps life insurance is a dying thing (pun intended). How much further ahead would I be to stick the money I'd devote to trying to play catch up into a Roth IRA or my employer 401(k)... Seems like a much wiser decision. Either way, my wife will get the dough from a retirement account or a life insurance policy...

What am I overlooking here, if anything? I know there's the whole "replacement income" thing as far as how much life insurance you should have. My wife has a very good job and I doubt she would need to rely on whatever she would get from this, except maybe to pay off any debt I might still have, which would be minor (probably a balance with my Sweetwater account lol).

No, I'm not dying or anything like that. I've just recently turned 50 and have had a run in with a (thankfully) minor case of cancer, I have borderline high blood pressure... and all of this just make one start to think that the bottom of the hill is closer than I'd like to admit.

I'd appreciate your thoughts on the matter!
Do you have a wife and kids that would be in the hole if you died and your income disappeared? If not you dont need insurance. I have a family and I still work and pay for everything, I have enough insurance to pay off my house in full so my wife wont have to struggle and money to pay for my kids college, thats all thats really needed. After that they can support themselves.
 

Georgiatec

Well-Known Member
VIP Member
Joined
Apr 23, 2010
Messages
5,968
Reaction score
6,109
Location
Looking for something I don't remember what.
Hard to say these days. I think the type of life insurance that pays out upon an untimely death will always be a good idea, especially if you are young, work in an industry where it is more likely to happen and the premiums are cheap.
I think there are more younger people going for a Self Invested Pension Plan (SIPP) these days. These pay out (to named beneficiaries) upon untimely death or when you retire. In the UK these are tax relieved, meaning for every £4.00 you put in it the government puts another £1.00 in. Like all investments though your capital is at risk....there are no sure things and you are looking at long term investment.
 

Adieu

Well-Known Member
Joined
Jan 12, 2013
Messages
2,822
Reaction score
2,934
Depends

If you have a gazillion hopeless dependents and oodles of debt on the mortgaged family compound, life insurance might be attractive and even sensible.

Otherwise... you do realize what needs to happen for it to pay out, right?
 

Kim Lucky Day

Well-Known Member
Gold Supporting Member
Joined
Aug 22, 2018
Messages
471
Reaction score
1,262
Depends

If you have a gazillion hopeless dependents and oodles of debt on the mortgaged family compound, life insurance might be attractive and even sensible.

Otherwise... you do realize what needs to happen for it to pay out, right?
Uh, yeah. I know it isn't for me, although in certain instances it could be...
 

axe4me

Well-Known Member
Joined
Feb 28, 2013
Messages
10,784
Reaction score
12,584
I'm self employed.

I'm going to retire when I'm 70.

I'll work from Feb. 21, 2023 (70th birtday till July 4, 2023).

I'm addicted to the $'s.

I roughly make $1k per week and it'll be difficult to give that up.

I'm hoping to go to music school and/or take music theory guitar courses and/or culinary school when I retire.

I currently have a small life insurance policy that I'm payng $98.00 a month for a $50K policy that'll pay for my funeral.

My home is paid off.

I've had numerous bouts with colon cancer in the past 10 years.

My oncologist tells me I'm abnormal in a good way.

I work full time and, he tells me, the hardest of all his patients.

He's amazed and told me "if I wasn't this stubborn, I wouldn't be around today".

I'm handling treatments well without side effects........the issue is that I'm tired all the time.

I'm up at 4:05 AM every day.

Work till 3:00 PM and drive about 300 miles per day for the state of NJ.

My mini van is a little over 3 years old and it has logged 187,000 miles.

I contract work from the most toxic/combative S.O.B. boss and work for the worst company I've ever had since 1984.

I dislike talking to this boss and avoid any work related issues.

It's ironic.

The first company (1984) that I worked for called me a superstar.

I've lost a little off my fastball but not all.

My current contract work has a boss that's impolite and disrespectfull.

This outfit is a dumpster fire and the boss is an "expert".

I do this work for the $'s and hate my job.

At this stage, I not going to quit.

20 years ago, I was making $4k per week.

This is what I know and will ride it out.

It'll be a mercy killing when I die.

I don't want to retire and die soon after.

Such is life.
 
Last edited:

Jethro Rocker

Well-Known Member
Joined
Mar 11, 2011
Messages
10,608
Reaction score
16,978
Location
Saskatoon, Canada
If what you have built up now is enough to pay the funeral expenses, hopefully the family can live off 401k and retirement account.
At some point the premiums outdo what you get and you only " win" if you die early. Quite a choice.
I say go with investments.
 

S.A.T.O.

Well-Known Member
Joined
Jan 14, 2011
Messages
1,498
Reaction score
1,123
Both my parents had good jobs. They didn’t have enough life insurance. My dad died at 49, what he had in life insurance was enough to pay for his funeral and for my mom to buy a plot for herself and to have my brother (who passed away couple of years earlier) moved so they could all be together. She had a little bit left over.
Few months after my dad passed my mom started falling down while walking. She was diagnosed with MS. She was in a wheel chair in two years. She almost lost the house because she couldn’t keep up. I had to step in and help her. It was a burden to me financially. Eventually I saved enough and bought the house from her, I did that because I knew we’d have to take care of her and the house was big enough my wife and I could start our own family in it.
You can’t trust the future. “My wife has a good job” that can go away at any minute. Investments are fine but they don’t tax life insurance as income. As you age you can lower the premium so the payments are lower. My rule of thumb is you should have enough to at least cover your outstanding debt so when you die the house can be paid off, loans etc. My dad not having enough insurance almost ruined my mom financially.
Just my .02
 


Top