re: Life insurance questions\advice

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A lot of people are having kids later in life and kids are still dependent on parents income, and many grandparents are assisting with grandkids expenses (either taking care of them or helping with school costs)

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Why haven't they worked to accumulate adequate savings?

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People aren't saving enough and having a large debt (like a mortgage) is not uncommon in your 60s and even 70s, and their spouse cannot survive financially without their income.

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You make fun of people that follow Dave Ramsey, but if they had they wouldn't be in this position.

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People want to leave a legacy to family or an organization

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They could leave it from the net worth they have accumulated.

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life insurance is the most efficient way to pass money down to heirs

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The lawyer just gave me a check from my parents estate, seemed pretty efficient to me, few people have estates that result in tax liability.

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Great way to equalize an estate among heirs

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Like I said we each got a check for a equal share of the estate, seemed pretty efficient, but really have no idea what you are talking about here.

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Permanent life insurance has several tax benefits for people in the right position.

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Those situations are rare among the average person.

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Bro, those two things do NOT go together

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Didn't intend them to go together. These were separate examples.

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Name one that is applicable to the average person that is not going to die with a multimillion dollar estate or tax obligation from business ownership.

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Those situations are rare among the average person.

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Again the guy said blanket statement "there are no reasons" for everyone over 50. I pointed out that there are many valid reasons. It wasn't supposed to shite on Ramsay but point out his customers don't typically have the need

You just named two. A third is cash deferred inside buildup when investment vehicles are maxes. You can also buy combo life/LTC products that provide tax free AB LTC benefits

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Totally disagree.. My old man passed away suddenly last year at the age of 65. He was self employed so he doesn't have a pension to leave my mom. My mom was 61 at the time, still working. Because of her age and her salary she wouldn't get any of my dads social security. When she retires and reaches full retirement age of 67 because she has a good pension she may receive a few hundred dollars. My parents had some savings and 401K but without the life insurance I don't know how my mom would make it the rest of her life. My old man had some whole life and had a 20 year term policy that was gonna expire when he turned 70.

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You missed the basis of his point.

Here is your risk : You get cancer or ALS or paralyzed in a car wreck. Because of this you lose your job . Because you lose your job you lose your benefits. You die and have no life insurance.

Some employers allow you to "carry" your own policy with you when you leave but many group risk policies will eventually void when you leave . So confirm that and if not get a small policy to cover your risk should that scenario occur. Because it happens every day. Not even really talking to you, I just want others reading the thread to understand potential risk.

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I hate to go Dave Ramsey here, but there's no reason to have life insurance past your 50s unless you completely suck at saving money.


Totally disagree.. My old man passed away suddenly last year at the age of 65

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So your dad was bad at saving money, that happens a lot.

I said there is absolutely no reason to have life insurance past your 50s unless you suck at saving money, and in trying to disagree with me you proved my point.

I agree with Dave Ramsey here, and he says to get a 15 year term life insurance AND start saving money at the same time along with getting debt free. That way, when your 15 year term is up you are now debt free with a couple hundred thousand in savings/ retirement.

That is the absolute best way to prepare for the worst case scenario for your family and save for yourself.

If you don't save money and don't pay off your debts, and you leave your wife at age 60 with a ton of debt and no savings...then yes keep your life insurance.

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I said there is absolutely no reason to have life insurance past your 50s unless you suck at saving money


Please stop posting financial advice/thoughts because you went to a Dave Ramsay seminar one time. There are many different reasons why someone should buy life insurance for older ages

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LOL, can you not read? And I have never gone to a seminar nor read his books. Simply heard it on the radio on occasion. I'm by no means a follower of his.

So instead of saying I'm wrong, offer some actual advice. I said there is no reason for the normal person who actually saves money and tries to get out of debt before retirment to have life insurance past their 50s. Because the average person that saves money and invests, will have a net worth of a couple of Mil by the time they are 60.

If you are worth over $11 mil and didn't do estate planning so you want some extra whole life insurance in your later years, fine. But that's not what we are talking about here. So outside of you selling life insurance, tell us some good reasons for someone in their 60s, that's debt free, with a couple of Mil to have life insurance please?

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Not where I work. We get unlimited sick time for free. Can't lose your job for being sick where I am. Sadly, I know it works because we have had a few get cancer over the last 5 years. And if we have something happens that prevents from physically being able to work again, we have a free AD&D rider that covers this stuff and pays out.

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That's rare though, extremely rare.

Certainly I have my life insurance maxed with my employer also, its something like 3 times my pay for like $10/ month. Its very cheap, but I would never have that as my primary life insurance. As you said, employer life insurance can be great. But I don't think anyone should rely on that as their only life insurance. At least get like $250k outside of your employer.

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So outside of you selling life insurance

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I don't sell life insurance and have no personal stake in people buy life insurance. You just have posted frequently on this board about financial advice with blanket statements + assumption of identical risk aversion for everyone

It isn't you saying to buy term life that I'm criticizing, it is you making a blanket catch-all statement.

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I said there is no reason for the normal operson

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Your actual phrasing was " unless you suck at saving money" as the only exclusion

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But that's not what we are talking about here

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Then maybe don't put out blanket catch all generalizations

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to have life insurance please?

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You are now changing your tune about estate planning but you also left out

- To cover value of illiquid assets (business, property etc)
- Combo life/LTC provides long term care benefits tax free
- People whose career has late stage salary acceleration-> BIL finished medical residency "later" at age 38 with $000,000s in debt, he won't have the luxury of saving/investment compounding interest on his side pre 60
-People whose retirement plan is based on primary earner's survival (pension w/ no survivorship, social security benefits, working after retirement)

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But 15 years of financial planning from 44-59 should be more than adequate to prepare for not NEEDING life insurance.

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No argument about ideally shouldn't "need" life insurance past your planned retirement age. I don't have term past my planned retirement age for example

You weren't talking about need, you specifically saidthere are no legitimate "reasons" which indicates a lack of understanding of the point of insurance

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All of these are very rare. But more importantly, all of them fall under my same criteria. People that suck at saving money.

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First, keep in mind that not all life insurance is bought to protect against loss of income (See business example response)

You also are missing some utility theory + probability theory which impacts how you view the role of insurance. The value of insurance is an expected utility argument and not expected financial value. You don't buy insurance to make money but to reduce risk. Generally speaking, you will have an expected loss in insurance from an economic opportunity perspective, that is the cost of risk reduction.

Key Point based on Above: Not everyone has the same level of risk appetite. As in, some people value reduced risk (more stable outcome) more than others. That isn't in any way a reflection of their financial IQ

Other note, you are arguing using a deterministic scenario with static assumptions (investment returns, lack of financial life events etc) for things you can't possibly know. You have to have assumptions though, so the key is how much you focus on avoiding "bad results" which relates to how risk averse you are.

The more risk averse someone is, the more they'd pay to reduce the negative downside risk of incorrect assumptions

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I would never recommend someone rely solely on a pension or social security, again they suck at saving money.

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It isn't about "relying" on SS or Pension benefits but stabilizing income streams by protecting against the loss of income from that source.

Just because I know my wife can survive w/ reduced retirement income doesn't mean I want her to. The question is how much would Ibe willing to pay to protect from reduced income?

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Finishing residency at age 38, that gives your BIL 21 years as a doctor to have enough cash and investments by the age of 59. If he can't do that, again he sucks at saving money.

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Again, he may save enough to get by, but the question is if he is willing to trade some expected results to reduce the floor of what they end up with

The question is "what is it worth?" to lock in a retirement lifestyle, potential inheritance for kids etc independent of if he dies during working year >60

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Business without enough liquid cash by the age of 59, again, sucks at saving money.

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If you have 3 children with child 1 taking over Child 2/3 "cashing out" their ownership stake, buying life insurance can avoid problems with Child 1 not having funds to pay fair value for those shares

Also, the "buyout" payment and/or sale of business/real estate to fund buyout may have tax implications that qualified life insurance doesn't have

Alternatively, sub in Wife for Child 2/3 or real estate for business.

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Long term care is a different story.

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There are a lot of intricacies to it for sure, but current tax law makes it very attractive to some people. I don't want to talk about LTC, that is a mess and anyone investing in insurance companies better look at their books