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Dropping life insurance

May 9th, 2007 at 08:36 pm

My husband was raised by his parents that insurance was a waste of money. They never had health insurance or life insurance.
I did take out a 10 year term policy on my husband when we built this house for about $200,000.
However, when it expired a few years ago, the new policy was so expensive we could not afford it.
I took a small policy out for $25,000 from AARP. It started out $30 a month and it is now almost $45 a month. I know it will just keep getting higher.
I was discussing it with dh last week and he wants me to drop the policy and just save the money.
We have plenty of cash in the bank and he thinks it is a waste of money.
I will continue to save that money and add to my challenge.
Just wondered what you all think?

7 Responses to “Dropping life insurance”

  1. monkeymama Says:
    1178744651

    If something were to happen would you have enough to retire on yourself? If yes, then I say a waste of moeny, indeed. $25k isn't much anyway.

    I have never been big on a ton of life insurance. The only exception is we locked in very low term rates for the next 30 years, so I don't mind. More needed for dh and the kids, than I, but I like to think the kids would have a lot of money if something happened to us, their guardians live in a very expensive area, and wouldn't necessarily have the means or room to support our kids otherwise. I'm still not really sold I need a big policy on dh, but the thing is it is cheap, so overall I don't sweat it.

    Beyond that I was never really sold on a ton of life insurance. From what I know of your situation, seems like a waste of money to me. My dh has a $25k policy from when he was a baby - what a joke - I have been begging MIL To cash it out and pocket the money - I know I could invest it better today myself. I know for us it won't mean a hill of beans, and I am guessing the same for you.

  2. Nic Says:
    1178746712

    Just a thought....whenever we've opened bank accounts, it always comes w/insurance forms. Check out if your bank has a policy w/similar coverage and lower premiums.

  3. creditcardfree Says:
    1178751779

    I would definitely drop it in your situation. Would the lack of $25,000 hurt you if your husband were to die? I'm guessing you could live quite well or frugally on what you have already accumulated.

  4. Aleta Says:
    1178761872

    About 6 or 7 years ago, my Mom told me that she was thinking about taking our life insurance (enough to bury her in her words). The price quoted I thought was expensive. I asked her to take the medium price for a funeral at that time and to invest in a CD and just keep renewing every year. She has done so and my brother just recently was able to cash in the CD to buy prepaid expenses for her. She now has Alzheimers and it worked out best for our family.

    I would tell you that alot has to depend on where you are right now. About 7 years ago, we cashed in a universal life insurance policy. We took the cash out and invested it in mutual funds for future funeral costs for me. We bought a 20 year term policy for my husband. If he were to pass, I would need the income so you have to calculate how many years of income you would need until your husband's retirement. That is to say that I know that you are older than your husband, but I'm sure that you are looking to his income until he retires. You have to protect yourself. By investing the cash part of the insurance policy for me, in time it should cover the burial expenses for both my husband and I. Just think it over. You didn't say what kind of insurance that you have. You can always buy term insurance.

  5. scfr Says:
    1178763194

    We've looked in to life insurance a couple times over the years but have always opted to NOT take any out. The reason is that we don't have any children, both of us work, we have savings, and we feel comfortable that the surviving spouse would be able to survive financially just fine on their own. We looked at the premiums and decided to just save that money instead.

  6. Ima saver Says:
    1178814707

    Great, I am glad that you agree. It is only term insurance, but i still feel like I am wasting that money. I will take it and invest instead.

  7. disneysteve Says:
    1178981008

    Ima - I agree with everyone that if you don't need the money to live, drop the coverage. HOWEVER, health insurance is a whole different story. Not having at least a good catastrophic coverage policy is basically playing Russian Roulette with your entire personal fortune. One illness in either of you could wipe out everything you have spent your life building. Heck, just my wife's gallbladder surgery last year racked up about $30,000 in bills and that was something relatively minor.

    I don't know how old you both are, but if you are not yet of Medicare age, you really should consider some type of health insurance to cover you until then.

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