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Should I cancel term life?
Posted on 2/12/10 at 4:41 pm
Posted on 2/12/10 at 4:41 pm
When my daughter was born, and I was still married, I bought term life insurance. In case I died, I wanted my wife to have be taken care of. Now that we are divorced, and she is remarried, do I need to keep it? My employer has a death benefit (3x my annual salary) and my daughter is the beneficiary. I also have equity in my home, retirement savings, etc that she would get in the event of my death. Is there any need to keep the extra coverage ?
5
Posted on 2/12/10 at 4:45 pm to Lou
quote:What is your daughter's age and financial/employment status? Is the 3X salary enough for her financial situation? If she is, say, six years old, then you probably still need additional insurance for her to get her through college....just as an example.
My employer has a death benefit (3x my annual salary) and my daughter is the beneficiary.
Having said that, you may not need as much term insurance as you have now in any case.
Posted on 2/12/10 at 4:52 pm to LSURussian
She is 6. If I cancel the term life, she would still get ~$400,000. I already have an ESA set up for her as well. And while it shouldn't matter, her mother and step dad are doing well financially, and her maternal grandparents are millionaires.
I was always under the impression that the purpose of term life insurance is to replace your income should you die. Since no one is depending on my income, I wonder if I need it anymore. Yes, I pay child support, but her mother doesn't "depend" on that money to get by.
I was always under the impression that the purpose of term life insurance is to replace your income should you die. Since no one is depending on my income, I wonder if I need it anymore. Yes, I pay child support, but her mother doesn't "depend" on that money to get by.
Posted on 2/12/10 at 4:56 pm to Lou
Another consideration is whether your daughter would qualify for benefits from your social security but basically it doesn't sound like you need the policy.
Posted on 2/12/10 at 4:56 pm to Lou
You made very good points with your second post.
The only other consideration then is how stable is your employment where you now work and how insurable (or more importantly, how UN-insurable) are you should you lose/quit your current job and you would then want/need to have another term policy?
The only other consideration then is how stable is your employment where you now work and how insurable (or more importantly, how UN-insurable) are you should you lose/quit your current job and you would then want/need to have another term policy?
Posted on 2/12/10 at 5:12 pm to LSURussian
any other family? mom ? dad?
Posted on 2/12/10 at 5:21 pm to Lou
quote:
My employer has a death benefit (3x my annual salary)
Is your employer provided plan an accidential death policy? If so, then you should keep the term.
Posted on 2/12/10 at 8:29 pm to TigerDeacon
Depends on how long the term is. I would keep it. Never know if you end up with another wife or kid.
Posted on 2/12/10 at 11:48 pm to TigerDeacon
quote:no, it's just life insurance. basically if i die for any reason other than suicide, my beneficiary (daughter) gets 3x my annual salary.
Is your employer provided plan an accidential death policy?
Posted on 2/13/10 at 10:23 am to Lou
quote:
My employer has a death benefit (3x my annual salary) and my daughter is the beneficiary. I also have equity in my home, retirement savings, etc that she would get in the event of my death. Is there any need to keep the extra coverage ?
Depending on if the term life is hurting your financial situation (unless it's a massive one) it's probaly a good idea to keep it. The one through your empoloyer is nice, but what if you decide to get a new job and your new one doesn't have an insurance policy? If you have to get another term policy chances are you will have a higher premium due to age increase...and if your health worsens between now and then you could have a much higher premium.
Also, have in a will that any of your insurance goes into a trust for your daughter. If not, your ex could have access to it for personal use if your daughter is under 18.
This post was edited on 2/13/10 at 10:25 am
Posted on 2/19/10 at 6:41 am to Lou
Yes, you do need the extra coverage. The policy you have through your employer will lapse when you retire, or in the event that you lose your job, or change jobs. Since life insurance premiums are to a large extent based on your age and health conditions, buying life insurance at a later date under the above circumstances may not get you the best deals. So rather than canceling your policy, you should simply change the beneficiary. Have your ex-wife’s name removed, and include your daughter’s name instead. It is a simple process and the agent or company that sold you the policy will be able to take care of it. While you are at it, you should also assess if you are insured for the right amount. Use an online life insurance needs calculator to assess just how much you need based on your current financial status.
Denise at AccuQuote
Disclaimer: I work for AccuQuote and this is my personal opinion.
Denise at AccuQuote
Disclaimer: I work for AccuQuote and this is my personal opinion.
Posted on 2/20/10 at 6:56 am to DeniseM
And also remember if your health changes suddenly (heart attack etc.) you will not be able to purchase any additional life insurance. Except thru your employer (maybe). Heart problems are happening at younger ages now-a-days.
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