do I need more term life ins?

[FLA]

I just went through a battery of genetic testing, there is a high likelihood that I have the same illness as my dad but we won't know for 6mos. The doc asked how much insurance I have, I said 300k of term. She told me to buy more now because I won't be able to once the tests come back.

But I really don't think I need more. this policy is $500 a yr until 64 when it shoots up to 4k and I would drop it. I have a 17 and almost 19 yr old with an ex who makes a good living. I just started SSDI and am earning very little, I don't need to replace my income for them. I think 150k each is enough to help with school loans or a down payment on a house. Their dad would meet their other needs.

does this sound reasonable? or would you buy more?

ETA: they would also get half of my retirement holdings, 500k, and a small pension, a share of this house, etc

[Joan.of.the.Arch]

It sounds as if they will be provided for. Even the youngest is nearly an adult and presumably could get work to provide for him/herself if worse came to worst. Perhaps, though, you should give some thought to how to structure the inheritance so that it doesn't doesn't get blown by very young adults who might not exercise adequate forethought.

[Joan.of.the.Arch]

Are you sure the pension is inheritable?

[disneysteve]

First, I hope your health remains good for many years to come and this is a non-issue. That said, let's address your question.

I don't need to replace my income for them.

The number one reason to have life insurance is to replace your income upon your death so that those who are financially dependent on you are provided for. It sounds like you aren't currently supporting anyone. If you were to die, they wouldn't suffer financially as a result. If that's the case, you don't "need" more insurance. Anything you leave them is a bonus and a gift.

That being the case, you just need to decide how large of a gift you want to give them. Also, is there anyone else you'd like to help via insurance, a charity perhaps?

For the kids, 150K each is a nice chunk of money to pay off college and maybe a bit more. Plus there is the other savings that they'd get.

Term life is dirt cheap so if you want more, now would be the time to get it but it really doesn't sound like there is any reason to have more.

[FLA]

In terms of the pension being inheritable, once I have a better idea of what my income will actually be (Long Term Disability is messing around with me which I've heard is very common), I will have another free meeting with a Vanguard CFP because I transferred my whole 401k there, I am entitled to the extra help. I am going to ask him what makes the most sense, take the lump sum pension now and invest it or take the monthly benefit. If I take the monthly route, then they wouldn't get it. But it's only worth maybe 46k to begin with. I tend to think the paltry monthly benefit is not the way to go.

thanks for the feedback, everyone. I kind of knew what I wanted to do but you've affirmed it.

[FLA]

It sounds as if they will be provided for. Even the youngest is nearly an adult and presumably could get work to provide for him/herself if worse came to worst. Perhaps, though, you should give some thought to how to structure the inheritance so that it doesn't doesn't get blown by very young adults who might not exercise adequate forethought.

a will and trust is on my to do list, just waiting for things to get settled with the latest legal squirmish with the ex and pay that off.

[sv2007]

Hi there, I just replied your other thread about living poorly.

Here's the deal.

Generally life insurance is bought for the other people in your life that have become dependent on your income. I.e. when you are gone, insurance can help those people transition off your income in a controlled manner.

Now, in the other thread, you've got no extra income to support others. If that's true , then I'd suggest not to bother getting a life insurance.

[FLA]

But I don't think I would cancel the policy I have, 300k worth that I can afford so I can leave the kids something extra. You don't mean have no life insurance at all, do you?

[sv2007]

But I don't think I would cancel the policy I have, 300k worth that I can afford so I can leave the kids something extra. You don't mean have no life insurance at all, do you?

Hi,
Yes, I mean no life insurance.

Are you buying just to leave something for your kids?
If so, have you checked with your kids on whether they want you to do this?
If it's my parent, I'd say "no thank you".

But each person must live life his/her own way in order to enjoy it. Although I personally won't get any life insurance in your shoes, that's just how I'd live.

[FLA]

They are 17 and 18, I don't think they know enough about their futures to answer that question. My DD is driven, I am not worried about her succeeding but I am concerned she will have a lot of student loans. My son, however, is very mellow and not driven to have a high-powered career. He is going to be going to school to be a luthier, not exactly a job with lots of potential. But he is a hard worker, he took a year off after HS and has been working like a dog, doing doubles so he could pay his own tuition. He's the type that seems to land on his feet even though his head is in the clouds.

For $500 a year (it may even be less), at least through the next decade, I'd like to keep insurance in place for them. If they turn out to not need that money, I can always cancel it then. Or if I just can't afford it anymore.

[sv2007]

Hmmm, still I'd ask my kids what they want in this situation.

I did a quit calculation, at $500/12 = $41/month, had it been put into the SPY SPDR S&P 500 ETF for the last 10 years, the account is worth $7296 now. (This is the actual money, broker fees, fund expenses, etc. have already been removed, and anybody can buy SPY.)

[FLA]

I'll ask them

[Thrif-t]

FLA if it's not causing you a hardship, I'd keep the insurance for your kids. I know I want my kids to have a good life and if I were in your position that's what I'd do.

[FLA]

I was just thinking, too, what if they turn out to have the genetic condition I am being worked up for? The treatment is costly. At least when I'm dying, I'd have the comfort of knowing they have that money.

[TexasHusker]

I would be surprised if you can get new life insurance bound before the test results are back. Don't answer your phone or check your mail until coverage is bound.