Term Life Insurance Articles
When It May Be Time To Stop Paying For Term Life Insurance
2010-11-29
Term life insurance is an affordable way to protect your family and your assets. But that doesn't mean that you should keep paying term life insurance rates forever without reviewing your current financial situation. If you are an empty nester with your house paid off and money invested, then you should consider whether you need a term life plan at all.
Life insurance is a godsend to a family with limited means who has just lost a loved one. It means they can pay for outstanding medical bills and provide a funeral for their loved one. If you have significant savings or investments then the need for immediate cash is less urgent if something happens to you. Consider whether your estate could be delayed in probate or if there are complex financial arrangements that could keep your heirs from getting the immediate funds they need.
A primary reason to have life insurance is to replace your income if the unthinkable happens. When you have a spouse and dependents at home counting on that income to pay the bills, life insurance is a smart investment. Once the kids are grown up and on their own, they no longer need your income. If you're retired, then you aren't counting on that income to pay bills.
Once you reach the point where your expenses are less then there is less need for a term life plan. If you have already paid for your children's education, paid off your house, or downsized to reduce your expenses then paying for a big life insurance policy may no longer make sense.
As you get older, term life insurance rates get more expensive. If you look at the amount you are paying for life insurance and see that those premiums could be earning more in another secure investment then it might be time to divert that money to investing rather than insurance. This assumes you have money in the bank or in low risk investments to cover funeral expenses, outstanding debts and to provide for any dependents that you have.
Even if you are not retirement age, you may not need term life insurance. If you have no dependents and you have enough savings to cover any debts, taxes or expenses owed when you die and you have set aside enough to provide for burial expenses then buying a term life insurance might not be necessary. Investing the money instead could bring higher returns.
Before cancelling you term life insurance policy, do some serious financial planning so that you have the numbers to back up your decision. Life insurance provides peace of mind, but it might be one that you no longer need.
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Term life insurance is an affordable way to protect your family and your assets. But that doesn't mean that you should keep paying term life insurance rates forever without reviewing your current financial situation. If you are an empty nester with your house paid off and money invested, then you should consider whether you need a term life plan at all.
Life insurance is a godsend to a family with limited means who has just lost a loved one. It means they can pay for outstanding medical bills and provide a funeral for their loved one. If you have significant savings or investments then the need for immediate cash is less urgent if something happens to you. Consider whether your estate could be delayed in probate or if there are complex financial arrangements that could keep your heirs from getting the immediate funds they need.
A primary reason to have life insurance is to replace your income if the unthinkable happens. When you have a spouse and dependents at home counting on that income to pay the bills, life insurance is a smart investment. Once the kids are grown up and on their own, they no longer need your income. If you're retired, then you aren't counting on that income to pay bills.
Once you reach the point where your expenses are less then there is less need for a term life plan. If you have already paid for your children's education, paid off your house, or downsized to reduce your expenses then paying for a big life insurance policy may no longer make sense.
As you get older, term life insurance rates get more expensive. If you look at the amount you are paying for life insurance and see that those premiums could be earning more in another secure investment then it might be time to divert that money to investing rather than insurance. This assumes you have money in the bank or in low risk investments to cover funeral expenses, outstanding debts and to provide for any dependents that you have.
Even if you are not retirement age, you may not need term life insurance. If you have no dependents and you have enough savings to cover any debts, taxes or expenses owed when you die and you have set aside enough to provide for burial expenses then buying a term life insurance might not be necessary. Investing the money instead could bring higher returns.
Before cancelling you term life insurance policy, do some serious financial planning so that you have the numbers to back up your decision. Life insurance provides peace of mind, but it might be one that you no longer need.
