Haha, I was a total idiot. During my career, I opted for the life insurance plan the company had as benefits plus the multiplier of number of times your salary. it didn't seem that expensive so I didn't think much of it. But, who was I trying to make rich? Never married, no significant other, no kids...I just had my younger brother and sister as beneficiaries. My brother makes a good income and is married, my sister is married...So when I in-process of my layoff wave, picking the benefits, life insurance was going to be a BIG monthly bill at that point...So I dropped it like a hot potato after someone asked that question earlier, who am I trying to make rich? LOL, idiot. Also, I never really thought much about health insurance as an employee. I stuck with always picking the "silver" package which was 80%/20%. All I though about was getting hit by a bus or something and a $1M bll. I thought being on the hook for $200K was better than $300K (our Bronze plan). The Gold plan seemed too expensive (90%/10%). Again, it was only after leaving and picking what I was going to choose, I picked the Bronze plan which is the 70/30 after I understood that whole percentage thing was just about when you hit the deductable amount in a year. THIS year it's $3500, THEN the company starts picking up 70% until the MOOP, when everything is covered. The premium cost difference was such (after I understood this stuff) that it didn't make sense. I'm only spending about $5-600/Year in medical costs...LOL, I'm a total idiot. Coulda saved much better over all these years. Of course, many of my colleagues had dependents and little kids get sick a lot and injuries at times and all that, so they often picked Silver or Gold...Oh well. LOL
Yes do not confuse investments with insurance. Companies try to constantly blur these lines. There are some who live on social security with little to no assets, they might need to keep a term policy in retirement, as your burial costs are your responsibility. I got rid of mine a couple weeks after retirement.
IMO...life insurance is to protect those that are dependent on you. I don't have anyone dependent on me any more, so I do not have life insurance. I don't think I will need it when I'm dead.
I had term life insurance while I was employed (free for employees and one could purchase more). That insurance ended at retirement. After retirement, we each purchased hybrid Long Term Care policies, and those coincidentally, have a life insurance benefit. We didn't buy the insurance for the life benefit but it is there. The life benefit is smallish and fixed, and it only pays out if you don't use the long term care benefit first. Strange arrangement that benefits the insurance company more than the recipient. The LTC payout will be challenging to initiate when we need it though (we've dealt with this with my mother's insurance policy) and IF we can ever get them to pay, it might only cover half what a LTC facility will charge in the future, -- but half is half. The other thing to remember about life insurance or regular LTC insurance, is the constantly rising rates as you get older. If you keep a policy that operates on a monthly charge, the rate will increase and eventually get to the point that you cannot afford it, so the insurance company pockets all your 30 years of payments.
This is a great topic for me. Thanks for delving into it…. Interesting how many people purchase whole life. My 90- and 89-year old in-laws swear that WL is what made them financially secure today (not their savings, SS or their 2 DB pensions). When I was working, I was worried about replacing my income. Term life insurance did its job then. Now retired - but without a pension, my concern has shifted to avoiding outliving my savings. My wife says I’m obsessed with saving money we might need later. Perhaps you could share you views on annuities, for those of us without pensions.
You can always sell your life insurance policy and receive a life settlement. A life settlement can offer money to help towards your retirement income.
We dropped life insurance when we no longer needed it. We have plenty of funds for both or one of us to live on for the rest of our life. I agree whole heartedly agree with your term insurance and investment separation approach. That was my approach my entire life. I’m a retired engineer and my wife has a degree in finance. Whole life insurance salesmen hated us…..
If you and your spouse each collect Social Security and you are both dependent on the combined income. Life insurance on both could provide income stability for the living when the other spouse dies.
Chris: Yes, that is true but if one person alone is dependent on both cash flows combined, it is unlikely the two people together would be surviving on those cash flows. They also would not likely be able to afford premiums.
My wife is retired and we still have a term life policy on her for now. i was going to cancel it but it's only $55 a month for a $250K. We are going to keep it effect because she provides child care for our grandkids. If she dies during the next few years, i'll give them money to our kids so they can cover childcare. My $500K term policy takes me until age 70, but i may keep it a few years into retirement to provide a windfall to make up for some lost pension and SS earnings and allow our savings to grow. My wife will get part of my pension, but the life policy seems like a good way to soften the income hit in our early retirement. The cost of our policies is a very small part of our retirement budget - less than 2%, so it seems like a good way to mitigate some risk during early retirement for our situation. others may not have our situation or figure there's a better way to deal with it. psychologically, i feel like the family's grief at the early loss of one or both of us will be ever so slightly eased with a thoughtfully planned windfall.
Hi Howard my employer provides $50000 of Life Insurance, AD&D of 50k, Business travel coverage and looks like a $4000 one time payment upon death. These will lapse once retire or termination. I also carry my own accident and catastrophic insurance with Unum due to the history of family elements.
I know from experience some people think the only way to bury someone is with an insurance policy. My FIL had a policy on all his kids and him and his wife. I convinced him to cash them all out and open a brokerage account and told him he could bury himself or his wife with just plain ole cash. Unfortunately many yrs of financial damage had already been done by this time.
I had life insurance at work. I think it was 3 times salary and you could buy more. I bought enough to give wife 7 times salary as I recall. But now I’m retired and don’t have any as I think my assets are sufficient for her to live comfortably if I dropped dead tomorrow. That said, I’d consider a little term on both of us if it was cheap enough. What is with the imposter dog?
Wisely when I was only 24 my agent told me to only buy term and by the time I was of retirement age I shouldn’t need it anymore. I’m 62 and I’ve got only a couple years and I’m done.
When I was working my employer provided term insurance for something like five times my salary. I didn't bother with it when I retired. Like you we have no children. My pension has a 100% survivor benefit and my wife has her own 403b and social security. Consequently I see no need for life insurance in retirement. She is also 8 years older than I am so I will likely outlive her.
Maybe a good topic would be using a form of Life Insurance that is convertible "Before Death" into LTC cost in the event Dementia/Alzheimers or just old age disablement. I think these are called Hybrid Policies?
Whole life since age 28 now have 128,000 I can borrow against at a stupid 8% but still the policy is worth 230,000. Don't have to pay back money borrowed but my dividend pays the yearly policy
Helo Howard and Juno... ( Is Otter still around??) Oh life insurance... younger families certainly , term is the way to go.. Some folks whose net worth is minimal during retirement is probably something to consider, a personal choice, Today, retired, nope no life insurance. Nevertheless, I have a story for Howard. When I was 32 my wife and I had 2 children , 1 and 3 years old. Through my employer I had excellent life insurance and considered a whole life. Well, we had the agent come over the house, understand at the time I was an investment advisor in Precious Metal, licensed by the CFTC. This life insurance clown comes over and gives us his pitch and pulls out a little casket, looks at my wife and says .. what are you going to when he is in here. Needless to say, he was asked to leave. True story so you know our views on the product. Take care Mr Howard and stay safe, Its going to rain in Florida.
MtoF: Otter has lost interest in being on camera and has relinquished the limelight to his litter sister. Insurance salespeople can be weird. Did you say you are in the Sarasota area? Should be okay there. I'm near Tampa which shouldn't be too bad. They did already cancel my softball game for tomorrow though.
I think I’ve heard some older people get keep life insurance becuase its a tax free payment to there heirs…I’ve heard some financial advisors talk about that strategy….
@@RetirementTalk43 For a small group in a high tax situation yes life insurance is highly leveraged and being tax free to heirs is worth it.. its rare but its a stategy some use and work out well.. not for most tho...
I’ve had term life insurance my whole 40 year career… I’m still here so never needed it.. in retirement I have no need for life insurance… I figure most dont in retirement… but not sure… ??
I might have something at work? If so it’s a small amount. I did not buy up from when I started. When my wife was alive we did have life insurance for her if I kicked the bucket prematurely and I think it was a term policy but we lost it during our great financial meltdown of 2019 so I have nothing now apart from what I might have at work. BTW my daughter will not need me to have insurance. She is on her own now and got a nice inheritance from my father. BTW I did get my father’s life insurance from work $5000!
As the bread winner, I had life insurance through work. Work offerred a basic coverage policy - no cost - and you could buy multiples of that. I bought multiples until the kids were on their own, then just had the no-cost coverage for 2 reasons. One, I was approaching retirement. Two, our finances were in better shape. Funny, just the other day I was conversing with my plumber about saving for the future, and he mentioned he buys life insurance - whole life I assumed. I thought that's unusual but he emphasized how safety was important to him. Well, at least he's saving. Oh, and he's 45.
I’ll be way more direct about life insurance. I can’t think of a single reason for you to buy any other kind of life insurance than term. Just invest the extra money and you’ll come out way ahead in the long term. 10-12 years of income should do it under most circumstances.
Donna: I understand that an awful lot of people do that, mostly because they are talked into it by sales people. However, you are better off just investing those premiums in a good stock index fund and unless you die very early, will have a lot more at the end.
@@RetirementTalk43 Maybe not, many of their stories involve a spouse or child collecting life insurance, then a back story of what they did to collect it. I have actually known of real cases.
I just bought life insurance. Just enough to bury me. Takes the burden off of mu kids. I don’t have the money to cover the burial. My mom did the same and it was a true gift to me. On the other hand my dad (still living) has zero money and no life insurance. It will be a disaster when he goes.
I had life insurance at work. One and a half years salary if I kicked the bucket. Also had a term policy for years until age 65. Went to renew it and premium was way too much for little pay back. My insurance broker made an honest statement. Get a shoe box and put that monthly amount in it or invest that monthly amount. So far using the shoe box and CD’s. We have enough to bury us both without the kids having to worry about it. Where’s Otter been? Did he retire from the spotlight?
Thanks for your comments, JDG. Otter got spooked a few weeks ago when something fell on the glass table in that room and made a very loud noise. Maybe he'll come around but he tends to be a little bit of a chicken.
Good video, Howard. I’ve never had a life insurance policy. I’ve never seen a need for it. I’m sure everyone’s situation is different.
Thanks, Tom.
Haha, I was a total idiot. During my career, I opted for the life insurance plan the company had as benefits plus the multiplier of number of times your salary. it didn't seem that expensive so I didn't think much of it. But, who was I trying to make rich? Never married, no significant other, no kids...I just had my younger brother and sister as beneficiaries. My brother makes a good income and is married, my sister is married...So when I in-process of my layoff wave, picking the benefits, life insurance was going to be a BIG monthly bill at that point...So I dropped it like a hot potato after someone asked that question earlier, who am I trying to make rich? LOL, idiot. Also, I never really thought much about health insurance as an employee. I stuck with always picking the "silver" package which was 80%/20%. All I though about was getting hit by a bus or something and a $1M bll. I thought being on the hook for $200K was better than $300K (our Bronze plan). The Gold plan seemed too expensive (90%/10%). Again, it was only after leaving and picking what I was going to choose, I picked the Bronze plan which is the 70/30 after I understood that whole percentage thing was just about when you hit the deductable amount in a year. THIS year it's $3500, THEN the company starts picking up 70% until the MOOP, when everything is covered. The premium cost difference was such (after I understood this stuff) that it didn't make sense. I'm only spending about $5-600/Year in medical costs...LOL, I'm a total idiot. Coulda saved much better over all these years. Of course, many of my colleagues had dependents and little kids get sick a lot and injuries at times and all that, so they often picked Silver or Gold...Oh well. LOL
PH: At least you can laugh about it now.
@@RetirementTalk43 🤣 yep!
Yes do not confuse investments with insurance. Companies try to constantly blur these lines. There are some who live on social security with little to no assets, they might need to keep a term policy in retirement, as your burial costs are your responsibility. I got rid of mine a couple weeks after retirement.
billy: Insurance agents can be devious.
IMO...life insurance is to protect those that are dependent on you. I don't have anyone dependent on me any more, so I do not have life insurance. I don't think I will need it when I'm dead.
Moe: Exactly.
I had term life insurance while I was employed (free for employees and one could purchase more). That insurance ended at retirement. After retirement, we each purchased hybrid Long Term Care policies, and those coincidentally, have a life insurance benefit. We didn't buy the insurance for the life benefit but it is there. The life benefit is smallish and fixed, and it only pays out if you don't use the long term care benefit first. Strange arrangement that benefits the insurance company more than the recipient. The LTC payout will be challenging to initiate when we need it though (we've dealt with this with my mother's insurance policy) and IF we can ever get them to pay, it might only cover half what a LTC facility will charge in the future, -- but half is half.
The other thing to remember about life insurance or regular LTC insurance, is the constantly rising rates as you get older. If you keep a policy that operates on a monthly charge, the rate will increase and eventually get to the point that you cannot afford it, so the insurance company pockets all your 30 years of payments.
austin: Thanks for those insights.
This is a great topic for me. Thanks for delving into it….
Interesting how many people purchase whole life. My 90- and 89-year old in-laws swear that WL is what made them financially secure today (not their savings, SS or their 2 DB pensions).
When I was working, I was worried about replacing my income. Term life insurance did its job then. Now retired - but without a pension, my concern has shifted to avoiding outliving my savings. My wife says I’m obsessed with saving money we might need later.
Perhaps you could share you views on annuities, for those of us without pensions.
ce: I touched on annuities in a past video but it might be time to do a full episode.
Love the pup in back!
Thanks, Valerie.
You can always sell your life insurance policy and receive a life settlement. A life settlement can offer money to help towards your retirement income.
malcolm: Surrender values can vary and term plus separate investments is still the way to go in my mind.
We dropped life insurance when we no longer needed it. We have plenty of funds for both or one of us to live on for the rest of our life.
I agree whole heartedly agree with your term insurance and investment separation approach. That was my approach my entire life.
I’m a retired engineer and my wife has a degree in finance.
Whole life insurance salesmen hated us…..
RDQ: If the insurance salesperson is angry, you are probably on the right track.
If you and your spouse each collect Social Security and you are both dependent on the combined income. Life insurance on both could provide income stability for the living when the other spouse dies.
Chris: Yes, that is true but if one person alone is dependent on both cash flows combined, it is unlikely the two people together would be surviving on those cash flows. They also would not likely be able to afford premiums.
My wife is retired and we still have a term life policy on her for now. i was going to cancel it but it's only $55 a month for a $250K. We are going to keep it effect because she provides child care for our grandkids. If she dies during the next few years, i'll give them money to our kids so they can cover childcare. My $500K term policy takes me until age 70, but i may keep it a few years into retirement to provide a windfall to make up for some lost pension and SS earnings and allow our savings to grow. My wife will get part of my pension, but the life policy seems like a good way to soften the income hit in our early retirement. The cost of our policies is a very small part of our retirement budget - less than 2%, so it seems like a good way to mitigate some risk during early retirement for our situation. others may not have our situation or figure there's a better way to deal with it. psychologically, i feel like the family's grief at the early loss of one or both of us will be ever so slightly eased with a thoughtfully planned windfall.
steve: If it makes financial sense to you, stay with it.
Hi Howard my employer provides $50000 of Life Insurance, AD&D of 50k, Business travel coverage and looks like a $4000 one time payment upon death. These will lapse once retire or termination. I also carry my own accident and catastrophic insurance with Unum due to the history of family elements.
Thanks, john.
I know from experience some people think the only way to bury someone is with an insurance policy. My FIL had a policy on all his kids and him and his wife. I convinced him to cash them all out and open a brokerage account and told him he could bury himself or his wife with just plain ole cash.
Unfortunately many yrs of financial damage had already been done by this time.
52: That was the result with my mother.
I had life insurance at work. I think it was 3 times salary and you could buy more. I bought enough to give wife 7 times salary as I recall. But now I’m retired and don’t have any as I think my assets are sufficient for her to live comfortably if I dropped dead tomorrow. That said, I’d consider a little term on both of us if it was cheap enough. What is with the imposter dog?
Thor: Juno has taken over the studio.
@@RetirementTalk43 I hope it wasn't via a violent coup to bask in Otter's limelight.
@@ThorIsBoss I don't think Juno is that Smart.
Wisely when I was only 24 my agent told me to only buy term and by the time I was of retirement age I shouldn’t need it anymore. I’m 62 and I’ve got only a couple years and I’m done.
52: It is a necessary evil but we just need to make it as less costly as we can, which is term.
When I was working my employer provided term insurance for something like five times my salary. I didn't bother with it when I retired. Like you we have no children. My pension has a 100% survivor benefit and my wife has her own 403b and social security. Consequently I see no need for life insurance in retirement. She is also 8 years older than I am so I will likely outlive her.
todd: It is needed when income has to be replaced at death. Otherwise, what's the point?
Maybe a good topic would be using a form of Life Insurance that is convertible "Before Death" into LTC cost in the event Dementia/Alzheimers or just old age disablement. I think these are called Hybrid Policies?
coleman: That would be REALLY expensive.
@@RetirementTalk43 Really... I'm not sure how much those Hybrid Policies are? You have experience with them?
@@colemant6845 Not directly, no.
Whole life since age 28 now have 128,000 I can borrow against at a stupid 8% but still the policy is worth 230,000. Don't have to pay back money borrowed but my dividend pays the yearly policy
Still better than taking from investment I guess but I'm at a loss understanding how to make the best of it
@@danreilly7491 Does it have a cash surrender value?
@RetirementTalk43 yes much lower and taxable
Helo Howard and Juno... ( Is Otter still around??) Oh life insurance... younger families certainly , term is the way to go.. Some folks whose net worth is minimal during retirement is probably something to consider, a personal choice, Today, retired, nope no life insurance. Nevertheless, I have a story for Howard. When I was 32 my wife and I had 2 children , 1 and 3 years old. Through my employer I had excellent life insurance and considered a whole life. Well, we had the agent come over the house, understand at the time I was an investment advisor in Precious Metal, licensed by the CFTC. This life insurance clown comes over and gives us his pitch and pulls out a little casket, looks at my wife and says .. what are you going to when he is in here. Needless to say, he was asked to leave. True story so you know our views on the product. Take care Mr Howard and stay safe, Its going to rain in Florida.
MtoF: Otter has lost interest in being on camera and has relinquished the limelight to his litter sister.
Insurance salespeople can be weird.
Did you say you are in the Sarasota area? Should be okay there. I'm near Tampa which shouldn't be too bad. They did already cancel my softball game for tomorrow though.
@@RetirementTalk43 Lake Wood Ranch in Sarasota and it's raining as expected.
OMG
I think I’ve heard some older people get keep life insurance becuase its a tax free payment to there heirs…I’ve heard some financial advisors talk about that strategy….
Lee: Is it worth the cost though?
@@RetirementTalk43 For a small group in a high tax situation yes life insurance is highly leveraged and being tax free to heirs is worth it.. its rare but its a stategy some use and work out well.. not for most tho...
I’ve had term life insurance my whole 40 year career… I’m still here so never needed it.. in retirement I have no need for life insurance… I figure most dont in retirement… but not sure… ??
lee: Yeah, like I said, I don't see the need either.
I might have something at work? If so it’s a small amount. I did not buy up from when I started. When my wife was alive we did have life insurance for her if I kicked the bucket prematurely and I think it was a term policy but we lost it during our great financial meltdown of 2019 so I have nothing now apart from what I might have at work. BTW my daughter will not need me to have insurance. She is on her own now and got a nice inheritance from my father. BTW I did get my father’s life insurance from work $5000!
Thanks for the comments, Bill.
As the bread winner, I had life insurance through work.
Work offerred a basic coverage policy - no cost - and you could buy multiples of that.
I bought multiples until the kids were on their own, then just had the no-cost coverage for 2 reasons.
One, I was approaching retirement. Two, our finances were in better shape.
Funny, just the other day I was conversing with my plumber about saving for the future, and he mentioned he buys life insurance - whole life I assumed.
I thought that's unusual but he emphasized how safety was important to him.
Well, at least he's saving.
Oh, and he's 45.
Sounds like he could use some good financial advice and not from someone who sells insurance products.
I’ll be way more direct about life insurance. I can’t think of a single reason for you to buy any other kind of life insurance than term. Just invest the extra money and you’ll come out way ahead in the long term. 10-12 years of income should do it under most circumstances.
Yep.
Getting life insurance to just pay for me and my husband’s funeral I don’t want my kids dipping in there inheritance to bury me !
Donna: I understand that an awful lot of people do that, mostly because they are talked into it by sales people. However, you are better off just investing those premiums in a good stock index fund and unless you die very early, will have a lot more at the end.
@@RetirementTalk43 thanks for the advice! I sure need it!
Without life insurance would there be an Oxygen Channel?
What: I haven't watched that channel but I'm sensing from your comment that they probably run a lot of insurance commercials.
@@RetirementTalk43 Maybe not, many of their stories involve a spouse or child collecting life insurance, then a back story of what they did to collect it. I have actually known of real cases.
No for me I am single investing in the markets…..
As you should.
I just bought life insurance. Just enough to bury me. Takes the burden off of mu kids. I don’t have the money to cover the burial. My mom did the same and it was a true gift to me.
On the other hand my dad (still living) has zero money and no life insurance. It will be a disaster when he goes.
karen: That's hard to hear.
@@RetirementTalk43 bottom line, I truly believe life insurance is important if one does not have a lot of money.
I had life insurance at work. One and a half years salary if I kicked the bucket. Also had a term policy for years until age 65. Went to renew it and premium was way too much for little pay back. My insurance broker made an honest statement. Get a shoe box and put that monthly amount in it or invest that monthly amount. So far using the shoe box and CD’s. We have enough to bury us both without the kids having to worry about it. Where’s Otter been? Did he retire from the spotlight?
Thanks for your comments, JDG. Otter got spooked a few weeks ago when something fell on the glass table in that room and made a very loud noise. Maybe he'll come around but he tends to be a little bit of a chicken.