Rethinking Life Insurance

As I approach retirement in a few years, I can’t help but question my thoughts on life insurance. Bottom line, I’m not a fan! I get a chuckle when I see the ads about life insurance securing a better future- a future that doesn’t include you.

In a perfect world, personal wealth should steadily build over time and when we pass from this world, those assets will go to our heirs. Best case, we stay in good health and live to be a ripe, old age where lifelong investing and good financial decision have blossomed into a respectable estate. In this perfect case scenario, there really is not a need for much, if any, life insurance.

However, back here in the real world, life happens. If the sole earner in a family passes early, loved ones are left not only mourning the loss, but also in a difficult spot financially trying to make ends meet. For this reason, especially during one’s earning years, it is absolutely necessary to have some life insurance coverage. I fully embrace this as a financial truth. Life insurance for the worker is a “necessary evil”, for lack of a better expression.

I’m fortunate to have the Survivor’s Benefit Plan from my military service which will guarantee a portion of my military retirement to my spouse upon my death. Currently, I’ve also got great life insurance coverage with my employer. But in a few years when I retire from work, what if anything do I need? My current plan is to not carry any life insurance except perhaps a small policy for burial and immediate expenses. We’ve been fortunate to build a nest egg, and my spouse is more than capable of handling the estate when I’m gone.

Should I get a small policy? I’ve never really shopped for life insurance! Either whole life or term life policies can get expensive over 55. Therein lies the crux of my beef with life insurance…premiums. $20 per month for a $250k policy is one thing when you are young, but $300 per month for a small policy in my golden years is another! Why not put that $300 per month in an investment specifically designated for immediate post death expenses?

Like most financial considerations, it comes down to a math problem and personal comfort level. Back in the day, life insurance policies were often the only assets folks left when they passed. Insurance used to be considered an absolutely necessary part of a family’s financial plan as displayed in this week’s featured pic!

I feel very thankful not to have to worry about it too much. That being said, I probably need to give it another look and seek the advice of a professional financial adviser (not an insurance salesperson). Like most things better to prepare now rather than waiting a few years until retirement!

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