Author Topic: Ditch husband's term life insurance?  (Read 3676 times)

Trudie

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Ditch husband's term life insurance?
« on: August 22, 2015, 06:19:58 AM »
My husband carries $100K in term life insurance through TIAA-CREF which costs us about $350 per year.  He also has insurance of 1 1/2 times his salary paid for by his employer (about $120K).

I'm thinking of ditching the coverage.  Our only debt is our mortgage ($122K) and our current net worth is $1.3 Million (including home equity of $250K).  We do not have children or financial responsibility for any dependents.

I guess the question I ask is:  "What would this money do for me?"  The true answer is that if left alone I would need some time to get my feet under me, but would then put my house on the market and move to be closer to my only sibling and parents (3 hours away).  I would quit my job/RE and live a simple lifestyle and could on what we already have.  I would think that the other life insurance money, unqualified investments, ROTH IRA contributions, and a home equity line of credit would be my line of defense.

Thoughts?

GizmoTX

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Re: Ditch husband's term life insurance?
« Reply #1 on: August 22, 2015, 07:37:55 AM »
You are correct: you don't need it.

You do need wills, advanced directive, springing POA for health & finances, & some liquidity for immediate expenses.


Trudie

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Re: Ditch husband's term life insurance?
« Reply #2 on: August 22, 2015, 07:30:00 PM »
All of our wills, POA, durable POA for health care are in place, so we should be in good shape.

I sort of already "knew" the answer to this one, but wanted some reassurance, I guess.  In such a circumstance there is no way I would stay in this house or situation, so I really would just need to figure out a plan to get my feet under me... and money isn't the problem.

Calvawt

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Re: Ditch husband's term life insurance?
« Reply #3 on: August 23, 2015, 12:41:30 PM »
Seems like a dump the coverage scenario to me, too.  At least price out other plans if you decide to keep it.


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StockBeard

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Re: Ditch husband's term life insurance?
« Reply #4 on: August 24, 2015, 10:00:12 AM »
Yup, if you have a sound plan in case you were left on your own, then you don't need this. It's just an expensive second safety net at this point, from your description.

Dicey

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Re: Ditch husband's term life insurance?
« Reply #5 on: August 24, 2015, 12:19:13 PM »
One more vote to pull the plug. Just remember that if DH changed jobs or retired, that other insurance would go away too. Fear not, IMHO, you don't need it, either.

Rosy

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Re: Ditch husband's term life insurance?
« Reply #6 on: August 24, 2015, 06:26:56 PM »
1. The employers life insurance is gone the minute he changes jobs
2. The term life - well, I like plenty of security blankets and at about $30 a month - I'm wondering if it wouldn't be worth keeping.

Think of it this way - how old is he, how healthy is he - family issues with heart attacks or stroke or similar? When does the term expire and what is the average life expectancy in his family?

Strictly in math terms - 10 years - $3500 in premium vs 100K
20 years - $7500 in premium vs 100K - how helpful would that be in a worst case scenario

You know you couldn't save up anywhere that amount and your own health is to be considered as well - could help out as LTC insurance for you. One never knows. But if you are keen on saving the $350 a year - ditch it, it is not a must have safety net. I'd keep it at least until it expires and then evaluate at renewal.

La Bibliotecaria Feroz

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Re: Ditch husband's term life insurance?
« Reply #7 on: August 24, 2015, 06:54:50 PM »
If you want to keep something as a security blanket, you might be able to reduce the amount of coverage at the original rate and term. When I bought mine, they told me I could do it once. Just one more option to consider--although you don't seem to need it.

Dicey

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Re: Ditch husband's term life insurance?
« Reply #8 on: August 24, 2015, 07:00:48 PM »
You know you couldn't save up anywhere that amount and your own health is to be considered as well - could help out as LTC insurance for you.
Ummm, they have a 1M+ nest egg, so yes, they could  save that amount, which is why they don't really need term life insurance. And once you're over that magic million mark, I question the need for LTC Insurance, which is far more expensive.

Rosy

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Re: Ditch husband's term life insurance?
« Reply #9 on: August 24, 2015, 08:05:25 PM »
^^^ - well then, if the math works out, then yes, I could be persuaded to ditch it.
... and no, I didn't mean for the OP to purchase LTC insurance, but to have the term life payout amount possibly serving as such; but I see your point and concede you are correct:).

Sibley

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Re: Ditch husband's term life insurance?
« Reply #10 on: August 25, 2015, 10:13:26 AM »
OP, maybe it'll help if you and DH sit down and plan. In the case of serious illness, in case of accident, etc. Write down things like preferred funeral plans. All the practical stuff that you'd need to do or know. If something does happen, then you'll have specific written directions, so even if you're in a fog you can get things taken care of. Or someone else can do it for you!

Given your stash, I don't see you as needing more life insurance.

MayDay

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Re: Ditch husband's term life insurance?
« Reply #11 on: August 25, 2015, 10:21:16 AM »
I wouldn't keep it.

We have much less savings, and H just has his work policy, which we can keep (at a slightly higher rate, since the company currently subsidizes it) if he leaves. 

But even if your husband changed jobs I am not sure why you need any term insurance at all.