Do We Need More Insurance After Term Runs Out

[PAdave]

My wife and I have term insurance till 2019, our kids are age 23 and 20, the 20 year old is going to be a junior in college, the 23 year old is graduated, looking for a job and living at home. We have very little bills, our house is paid off in about a year. We have around $700,000 in investments, our house is worth around $400,000.
The agent contacted me telling me that we really should buy a universal life policy on my wife and I, costing around $3,000 - $4,000 per year. I really thought I would be okay after my term policy ran out in 2019. Any thoughts?

 

[STIBROKER]

My wife and I have term insurance till 2019, our kids are age 23 and 20, the 20 year old is going to be a junior in college, the 23 year old is graduated, looking for a job and living at home. We have very little bills, our house is paid off in about a year. We have around $700,000 in investments, our house is worth around $400,000.
The agent contacted me telling me that we really should buy a universal life policy on my wife and I, costing around $3,000 - $4,000 per year. I really thought I would be okay after my term policy ran out in 2019. Any thoughts?

only if its a GUL and drop the term........

 

[somarco]

I really thought I would be okay after my term policy ran out in 2019. Any thoughts?

How long will you live? What will your financial situation be when you do die?

 

[Josh]

What's the purpose of the insurance?

Are they converting your term to a GUL?

 

[AboutThatLife]

I see some questions nobody has asked here so I will ask them. My primary concern with insurance in your situation if I were you would be "how easily could my family access the necessary funds if something happened to me?". Up until 2019 that question is answered.

How long do you plan to continue working? I imagine you want to preserve the integrity and value of your assets? Taking time for estate planning may help decrease your potential insurance burden.

Depending on what type of assets you have, you may be able to fund your insurance needs without spending "new" money while generating new income for yourself.

 

[DHK]

My wife and I have term insurance till 2019, our kids are age 23 and 20, the 20 year old is going to be a junior in college, the 23 year old is graduated, looking for a job and living at home. We have very little bills, our house is paid off in about a year. We have around $700,000 in investments, our house is worth around $400,000.
The agent contacted me telling me that we really should buy a universal life policy on my wife and I, costing around $3,000 - $4,000 per year. I really thought I would be okay after my term policy ran out in 2019. Any thoughts?

My thoughts:

You should want life insurance throughout your life... you just don't know why yet.

1) Social Security offset for surviving spouse (remember - upon the first death, the surviving spouse gets the higher of the two benefits, but not both).

2) Covering a potential reverse mortgage so you can have a tax-free source of retirement capital. A tax-free, non-correlated asset to the stock market can be helpful. Without a life insurance policy, this would truly be a 'last resort' option rather than something strategic for your family. The life insurance policy could pay off the reverse mortgage that would be due upon death.

3) A similar strategy as #2 could've been done with a sizeable cash value policy on its own, but you bought a term policy instead. Again, a tax-free, non-correlated asset to the stock market can be helpful.

4) Did you want to leave money to anyone? If all your money is tied up in your retirement investments, the IRS will want a sizeable portion of it. Using a life insurance policy can help pay for income taxes due on retirement assets for your beneficiaries.

5) Many policies offer a Chronic Illness rider that will let you accelerate the payment of your death benefits to cover LTC expenses - for when you can't take care of yourself.

These are very strategic reasons to have a sizeable life insurance policy in retirement. (I think your agent should split the commission on the new policy with me now, but oh well.)

 

[Mattschmidt]

Probably best to sit down with your Financial advisor, and discuss the need of coverage.

I definitely wouldn't post your situation on a Forum, and get advice from 100's of people who may not know your complete financial picture.

 

[somarco]

If the OP had an advisor he trusted he wouldn't be posting here, would he?

 

[AboutThatLife]

Probably best to sit down with your Financial advisor, and discuss the need of coverage.

I definitely wouldn't post your situation on a Forum, and get advice from 100's of people who may not know your complete financial picture.

Not hundreds, just the regular cast of characters.

 

[scagnt83]

A major piece of this puzzle is missing.... how old is the OP? That can make a big difference.