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life insurance

No spouse, no kids. Time to cancel life insurance?

September 12, 2013 By Liz Weston

Dear Liz: I am 43 and divorced. I have a mortgage and an auto payment. I fully fund my 401(k) each year and am funding a Roth IRA. I also have emergency savings of $30,000 and a term life insurance policy for $350,000. What I don’t have is children or a spouse. I am thinking of canceling the policy, but is this a good idea?

Answer: The most important question to answer about life insurance is whether you need it. If no one is financially dependent on you, the answer is probably no.

Then again, canceling your policy is a bet that your life isn’t going to change — that you won’t someday have a partner who may need your income to pay the mortgage or other expenses, for example. If you’ve canceled your policy, you may find it difficult — not to mention more expensive — to get similar coverage later.

Term insurance is typically fairly cheap. Current quotes for a $350,000 30-year level term policy for a woman your age are typically between $40 and $60 a month. You’ll have to weigh whether the savings is worth what you’d be giving up.

Filed Under: Insurance, Q&A Tagged With: canceling life insurance, Insurance, life insurance

Tuesday’s need-to-know money news

September 3, 2013 By Liz Weston

credit card detailed 1Getting along with debt collectors, saving big on life insurance, and what to take into consideration as your work towards retirement.

6 Important Things You Need to Know About Debt Collectors
Working with debt collectors doesn’t have to be a miserable situation.

5 Smart Ways to Save Big on Life Insurance
Getting the most bang for your life insurance bucks.

First Credit Card? Six Tips for College Students
Avoiding the temptations that come with your first credit card.

How to Spot Hidden 401(k) Fees
Discovering the hidden fees lurking below the surface of your 401(K).

5 Irrational Retirement Decisions
How to avoid decisions that work against your own best interests.

10 Keys To Retirement’s Holy Grail
The top 10 things to consider as you look towards retirement.

Filed Under: Liz's Blog Tagged With: 401(k), Credit Cards, debt collectors, life insurance, Retirement

Monday’s need-to-know money news

August 5, 2013 By Liz Weston

1994-08-033 002Living within your means with a smile on your face, getting the most from your credit score, and separating fact from fiction with life insurance.

5 Tips for Frugal Living That Won’t Leave You Feeling Miserable
Living within your means doesn’t mean misery.

What’s the Lowest Credit Score You Can Get?
Don’t let your fear of The Number prevent you from monitoring your credit.

6 Worst Myths About Life Insurance
Separating fact from fiction.

7 Courses Finance Students Should Take
Studying beyond the numbers.

Does College still pay off?
Are the degrees still worth the dollars?

Filed Under: Liz's Blog Tagged With: college costs, Credit Scores, frugal, frugal living, frugality, life insurance

Thursday’s need-to-know money news

July 18, 2013 By Liz Weston

Zemanta Related Posts ThumbnailAdvice on how to hire a contractor, how not to waste your summer vacation money on AMT fees, and what to do when you realize someone has hacked your email.

Top 8 Pro Tips on Hiring a Contractor
Home renovations can be much less stressful with the right contractor.

Save Money on Summer Travel by Avoiding ATM Fees
How not to waste your souvenir money on ATM fees.

9 Things to Do When Your Email is Hacked
Panicking is not one of them.

9 Ways to Save on Flights
How not to waste the aforementioned souvenir money on plane tickets.

Do Women Over 50 Need Life Insurance?
The pros and cons of purchasing a policy after 50.

Filed Under: Liz's Blog Tagged With: fraud, life insurance, saving money, summer travel

What’s a father worth?

June 15, 2013 By Liz Weston

candid image of father and son walking crowded streetAbout $23,000, according to this post from Insure. com:

Insure.com’s 2013 Father’s Day Index puts Dad’s household tasks at $23,344 a year, up from last year’s $20,248. The increase is largely due to higher mean hourly wages for drivers, teachers, coaches and plumbers, according to Bureau of Labor Statistics data.

…

Moms will likely feel slighted this year. Although Mom’s 2013 value is higher than Dad’s at just under $60,000, mothers have been seeing their value drop every year.

These surveys have to be taken with a grain of salt. The ones that put Mom’s value in the six figures need a whole shaker, since they typically value Mom’s contributions as chauffeur, cook and event organizer at the same rates you’d pay a top-ranked professional–rather than the amount you’d pay a nanny or other caregiver to perform the same functions.

But still, they’re kind of fun to read, and they could remind you that life without Dad (or Mom) could be expensive, which is why you want life insurance if others are financially dependent on you.

Filed Under: Liz's Blog Tagged With: father, life insurance, parents

Should life insurance be renewed in retirement?

February 25, 2013 By Liz Weston

Dear Liz: My life insurance policy of $500,000 will end in four years, when I’m 63. My wife’s policy ends at age 62. Our kids are 28 and 25 and successfully launched with careers. I also have a $180,000 life insurance policy through my job that expires when I plan to retire, also at age 63. My wife and I have long-term-care insurance policies. We have $170,000 in an active investment account plus $1.4 million in our 401(k)s. Our kids also have trust funds that they will get when they turn 30 of about $80,000 each. Should I buy more life insurance for 10 to 15 years? Our estate, which is in a living trust, will pass to the kids. Our house is worth about $1 million.

Answer: The first question you must ask when it comes to life insurance is whether you need it. If you have people who are financially dependent on you, you typically do. If your wife has sufficient retirement income should you die, and vice versa, then you probably don’t.

So-called permanent or cash-value life insurance is often sold as a way to pay estate taxes, but again, it doesn’t look as if you’ll need that coverage. Congress increased the estate tax exemption limit for 2012 to $5.12 million, and that amount is tied to inflation going forward.

Still, this is a good question to pose to a fee-only financial planner, and you should be seeing one for a consultation before you retire in any case. Retirement involves too many complicated, irreversible decisions to proceed without help.

Filed Under: Insurance, Q&A, Retirement Tagged With: cash-value insurance, life insurance, Retirement, term insurance

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