<p>My wife will receive my pension which would be about $50,000 today. Hashing out the numbers and the concerns with health care costs for her now is not the time to consider dropping the insurance in full. I do have some term insurance which would increase her cash balances to about $400k.
If I died today she would be left with $50,000 in current income and $400k in cash but have the cost of COBRA and then the need to purchase her own policy when that runs out. She would also have a mortgage of $1000 per month. Taxes and Homeowners insurance add $700 to that. Conservatively on housing prices we have $150 k in equity but she would not want to sell and move.
I will keep all the insurance for now.</p>
<p>Good post, tom1944.</p>
<p>We are at similar point in life and face this issue also.
My DH has a term policy that has perhaps 7 more years on it and the company if very diligent about sending us yearly ‘warnings’ that the premium will go to several thousand dollars a month at the end of the term.</p>
<p>Well, we have no intention of renewing or buying replacement life insurance at that stage in life. Kids will be off and our mortgage will be down to last few years. If we had to, we could pay off the balance at that time. </p>
<p>It’s a puzzle all right.</p>
<p>Drop the policy but don’t cash it in, let the dividend pay what it will, and put the extra $250/month toward your mortgage.</p>
<p>dmd- my interest rate is so low 4.5% that I do not mind having the mortgage for the entire term. With the tax benefit the cost is really only 3.8% or less
I know interest rates are low now but over time and with inflation I would put the $250 somewhere else. The problem is my wife would put it towards stuff for my D or the pets etc.</p>
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<p>If you have an old whole life policy with a lot of cash in it, it might make sense to do a 1035 exchange for a new universal life policy if you are insurable. Many people do not need the cash in these policies. You could potentially increase the death benefit and have a paid up policy with no additional premiums paid by rolling over the cash to the new policy. You would then have a paid up policy. Remember if you die, you only get the death benefit and not the cash value.</p>
<p>I think the mail thought on a lifetime plan (whole life or universal life) is a plan you cannot outlive. If you live to a ripe old age then the coverage is still affordable or even paid up at an early age.</p>
<p>I work in a life insurance office and we do have a couple of clients in their 90s whose policies from the 80s have performed beautifully.</p>
<p>Evey day I see guys in their 50s & 60s who have not paid off their homes as planned and who are no longer insurable or at least not at the pretty rates. but their term policy has expired, you may be fiscally conservative and not need a lifetime plan, but some people will find it to work best for their situation.</p>
<p>Redondo Dave it right, if your policy is pre the preferred plus rates of about 1996 and if you can qualify for those rates, you may do better reapplying, even though you are older.</p>
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<p>Not necessarily–it depends on the option you chose when you bought the insurance. I chose Option B, where the death benefit is the face value plus the cash value. I haven’t paid a premium since 2002, and I’m making 4.5% on the cash value (I love you, USAA!).</p>