[Cody]

Even if you reach FI, you may not want to cancel your term life insurance.

Real Example:

30-year, $250,000 policy purchased at age 35 for $237.50 per year (fixed premium).

25 years later, at age 60, he retires and no longer needs life insurance.

However, the remaining cost over the next 5 years is $1,188 – which is only 0.5% of the death benefit.

Would you keep or cancel it?

Which other variables would you consider?

[Golden]

We have several policies. Dropped all but 1. It’s so darn cheap because we bought it 17 years ago.

It’s a little security blanket for the family.

[Bill]

When to cancel disability insurance is another question Cody Garrett. I was thinking of cancelling ours between 60-62 years old.

The policies term out at 65 and the cost for what is a 9-10k monthly benefit for me doesn’t seem to be worth it when I plan to FI at 63-64.

Thoughts?

[Rick]

What started many years ago as covering my liabilities now covers a part of my assets.

If I were to have have a long lingering illness, I could drain much of my assets dealing with the illness leaving far less to my heirs.

The policy is now about asset protection.

And, as you noted in your post, it’s become cheap protection.

[Bill Yount]

I plan on keeping our term insurance policies until they run out. A lot of benefit to the surviving spouse for little cost.

[Holly]

I think this logic only works if you bought when you were young. I had no reason to buy life insurance when I was young, no kids, no house, no spouse.

Now I’m 42, and still no kids but I do have a house and a husband.

He can easily work and cover his bills if I were to pass, and same with me, because we were both very financially and professionally independent before we met.

So we just plan to self-insure at this point.

[Marty]

I have term until I’m 70 for 1.25 million. Keeping it for sure

[Jay]

100% cancel. The odds are against you way against Keeping it is just playing the lottery.

[Karl]

Fallacy of sunk cost.
“No longer needs life insurance” is all the information you need.

$1 is too much if that statement is true.

[Erica]

I’m always confused by life insurance. So me and my ex have life insurance, with each other listed as beneficiaries.

Our divorce decree requires it until the youngest is 18.

If after that point, I want to switch the beneficiaries to the kids, I could do that.

But does the policy go forever?

Like even if I live until 100?

How does that work?

Maybe I have to ask my Northwestern Mutual guy if there is an expiration/maturity on the policy?

I pay about $75/mo for $1.5MM in coverage.

I hope that’s a good price?

[Mitch]

We hit better than lean fi, less than fat, refuse to cancel term that would double our fi number.

Seems silly to cancel it for a trivial monthly spend.

Happy to keep these policies in force!

[Author]

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