My husband and I bought a 20-year life insurance policy 19 years ago. Now that it’s almost over, we’re considering when to end life insurance. Should we renew? If we get another policy, how long should we buy it for? Here’s how we’re making our decision.
Are We Self-Sufficient Without the Other’s Income?
Since we were married, we have had combined finances. We’ve also gone through periods where I made significantly more money than him, and now, he makes considerably more money than I do.
Looking at our budget, mortgage debt, ages, and retirement, we immediately recognized that we were not yet ready to go without life insurance. If something happened to my husband, I would have difficulty supporting myself, especially since we bought a new house last year and only have about 25 percent equity.
Are We Old Enough to Pull from Retirement?
We still have about a decade before we can pull from our retirement penalty-free, so if something happened to my husband and I needed income, pulling from retirement is not an option for me.
Do We Have Enough in Retirement?
While we’re making good progress saving for retirement, especially considering we started our careers with low-income and student loan debt, we’re not yet where we need to be. We will need to both work for at least the next 10 years to get our retirement to a level where we would feel more comfortable.
For How Long Should We Buy Life Insurance?
Based on our estimates, we need to buy life insurance for the next 10 to 15 years. Fifteen years would be ideal, but if the policy is too expensive, we could get by with 10 years.
What Type of Policy Should We Get and With Which Company?
When we got our life insurance 20 years ago, we chose term life and went through a broker. This time around, we will likely do things differently.
We still plan to get term life insurance. However, we will ask our current life insurance provider for a quote to extend our term. After that, we will use a broker if we’re unhappy with our current provider’s quote.
Why Buy Life Insurance
Some people put off buying life insurance because they can’t imagine the unimaginable happening. However, my dad died when he was only 38 years old, so I have seen what happens when someone dies unexpectedly. There’s nothing worse than going through the grieving process and worrying about how to continue to pay your mortgage and put food on the table.
My husband and I will not go without life insurance until both of us can survive financially if the other one dies early. As much as we don’t want to spend the money monthly on a policy because we know life insurance will be more expensive now that we’re older, we will.
When do you plan to quit buying life insurance?
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Melissa Batai
Melissa is a writer and virtual assistant. She earned her Master’s from Southern Illinois University, and her Bachelor’s in English from the University of Michigan. When she’s not working, you can find her reading a good book, cooking, or traveling. She resides in New York where she loves the natural beauty of the area.
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