Quote:
Originally Posted by Rain Man
I have a 25-year term life policy, whatever that means. I think it expires at some point, and I'm trying to talk the wife into not having life insurance after that. We have no kids and our house is paid off, and by the time we need to buy insurance again we'll be close to retirement. We can cover funeral costs and that sort of thing, so I'd rather save the relatively large cost of buying life insurance for two retired people. I'm not sure she's buying into it yet, though.
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So term vs whole is pretty easy. Term life you can think of just like car insurance. The years (in your case 25) means that the price you pay per year is flat. Each year you pay X, and you get Y as a death benefit if you die during the term. If you don't die during the term, congratulations, you get NOTHING for paying in all those years. The upside is that it's MUCH cheaper than whole life.
I can think of no sane reason whatsoever why someone in your shoes would pay for term life insurance once your current policies lapse. Honestly, I don't know why you're paying for it now. It's kinda simple to me -- if the survivor does not need the money from life insurance if the spouse dies, then what are you "insuring".
I deal with this in my professional life in many different ways, but insurance literally protects against risk. It's what the freaking word MEANS. What risk are you protecting against by paying this money? If there is no risk that matters, why would you waste money protecting against it "just in case"?
If she thinks of it that way, rather than as something you have to have, like car insurance, then that may help her realize she doesn't need it at all. She can live and retire comfortably without it even you do pass away.
Also, the premiums are going to be hella high once you come off that flat rate policy you're on now.