Anyone else nervous about canceling Term Life Insurance?

[Drake3287]

When we started out having family 25 years ago I purchased Term Life Insurance policy for the both of us. Not huge policies but big enough to pay off the mortgage in the event one of us died.

25 year's later and I'm now retired, have a healthy savings/retirement and have our house paid off. To me we no longer need this Term Policy, it did what it was suppose to do.

Problem is now I get this feeling that if I cancel the policy I'm (or my wife) sure to need it. Sort of like the minute your car extended warranty expires your car breaks down. Anyone else have remorse or a bad feeling when canceling a Life Insurance Policy? Obviously your still alive!

[disneysteve]

We haven't reached that point yet but I'll be happy to cancel it and not have that bill to pay every month.

If the need for insurance no longer exists, pat yourself on the back for reaching this stage of life, retiring from your career, paying off your house, and building a sufficient nest egg.

Will one of you die at some point? Of course. But you've done all of the right things to provide for the surviving partner.

[Nutria]

When we started out having family 25 years ago I purchased Term Life Insurance policy for the both of us. Not huge policies but big enough to pay off the mortgage in the event one of us died.

25 year's later and I'm now retired, have a healthy savings/retirement and have our house paid off. To me we no longer need this Term Policy, it did what it was suppose to do.

Problem is now I get this feeling that if I cancel the policy I'm (or my wife) sure to need it. Sort of like the minute your car extended warranty expires your car breaks down. Anyone else have remorse or a bad feeling when canceling a Life Insurance Policy? Obviously your still alive!

Are you retired at 65, or retired at 55? (That, to me, would be a determining factor.)

[disneysteve]

Are you retired at 65, or retired at 55? (That, to me, would be a determining factor.)

Why do you think the age matters? Either there's a financial need for insurance or there's not, regardless of age.

[Nutria]

Why do you think the age matters? Either there's a financial need for insurance or there's not, regardless of age.

Age has a bearing on financial need.

For example, at age 55 you're 10 years farther away from death than you are at age 65, and any estate remaining after death taxes would have to stretch that much longer.

[corn18]

One thing to consider is the loss of any pension or SS benefits upon the death of one partner. I had forgotten about that and had to add a bit of longer term life insurance to cover it. I have my term policies laddered so as I build wealth, the life insurance can go away. I have 5 term policies in a ladder that expire starting at age 59 and ending at age 78. And they all have a terminal illness rider so maybe that could help with that type of thing.

Can't wait to cnx them when they are not needed.

[disneysteve]

Age has a bearing on financial need.

Of course, but it doesn't necessarily have any bearing on the need for life insurance. If OP is retired and has little to no debt and "healthy savings/retirement", why would he need life insurance? If their nest egg is sufficient to meet their anticipated needs for the rest of their lives, does it matter if he is 55 or 65?

OP also stated that the policies were purchased to pay off the mortgage if either of them died early. The mortgage is now paid off so the purpose of the policies no longer exists.

[tripods68]

Problem is now I get this feeling that if I cancel the policy I'm (or my wife) sure to need it. Sort of like the minute your car extended warranty expires your car breaks down. Anyone else have remorse or a bad feeling when canceling a Life Insurance Policy? Obviously your still alive!

It seems like you want the "security" for your wife. Have you asked discussed it with your wife why you should or shouldn't cancel?

[disneysteve]

It seems like you want the "security" for your wife. Have you asked discussed it with your wife why you should or shouldn't cancel?

Good question. Sometimes it's not just about the money.

[Drake3287]

The way I look at it is if I should die she would still be able to live the same comfortable life style (financially) without the life insurance. My retirement has full spousal continuance.

The insurance at this point would only be "extra" money, I'm only concerned with her being financially secure after my death, not being wealthier.

With this Term Insurance only getting more expensive each year I'd rather use this money for other things.

[disneysteve]

The way I look at it is if I should die she would still be able to live the same comfortable life style (financially) without the life insurance. My retirement has full spousal continuance.

The insurance at this point would only be "extra" money, I'm only concerned with her being financially secure after my death, not being wealthier.

With this Term Insurance only getting more expensive each year I'd rather use this money for other things.

Then there's your answer. Cancel it and know that you've done a great job preparing for this point in your lives.

[tripods68]

The way I look at it is if I should die she would still be able to live the same comfortable life style (financially) without the life insurance. My retirement has full spousal continuance.

The insurance at this point would only be "extra" money, I'm only concerned with her being financially secure after my death, not being wealthier.

With this Term Insurance only getting more expensive each year I'd rather use this money for other things.

Her definition of being wealthy might be different than your definition. You also mention you are financially secure being such that---But contradict it by saying it's getting more "expensive". You either want to cancel it due to the rising cost, or keeps it for the added financial security of your wife in case i die. I think You know the answer already.

[scfr]

We've never had life insurance (looked in to it but decided we were OK without it).

But I think it's perfectly normal to have some doubts any time you make a major non-reversible financial decision. I've felt that sort of emotional doubt myself a few times (for example, before we mailed the check to pay off the mortgage on our previous house). Even though we'd thought it through carefully and the numbers made sense, there was still a bit of a nagging doubt that something catastrophic might go wrong that would cause us to realize we'd made the wrong decision. I let my head (not my emotions) carry the day, put the check in the mail, and it was the right decision.

[Nutria]

I've felt that sort of emotional doubt myself a few times (for example, before we mailed the check to pay off the mortgage on our previous house). Even though we'd thought it through carefully and the numbers made sense, there was still a bit of a nagging doubt that something catastrophic might go wrong that would cause us to realize we'd made the wrong decision.

Were you afraid you might need the liquidity?

[Like2Plan]

The way I look at it is if I should die she would still be able to live the same comfortable life style (financially) without the life insurance. My retirement has full spousal continuance.

The insurance at this point would only be "extra" money, I'm only concerned with her being financially secure after my death, not being wealthier.

With this Term Insurance only getting more expensive each year I'd rather use this money for other things.

Drake3287,
What did you decide? (Or, have you made a decision?) We were in a similar quandary --we mulled it over for a few years. Finally, last year we decided to phase out the policy. We reduced it to 25% of the original amount. I think we will cancel the policy this year.