I am soon going to have to make decisions on life insurance amounts for myself and my husband that will be for the time after my last child is out of the house. I was wondering what amounts of life insurance people have into retirement? I know I may not need as much as when kids were young, but it seems an amount greater than $50,000 would be good. Yet we will have to be able to afford the premiums once we retire. Thoughts?
My wife still works, so we have a small amount of term life insurance offered at low group rates. Other than that, we have no life insurance and shouldn't need it.
We paid off all credit cards and car loans while I was still working. We have no debts except a small amount left on our low interest mortgage, which is far less than our holdings. We have an emergency fund that should cover about 1 year of no income from any source, which isn't likely to happen unless the global economy goes belly up. Our house is worth many times the mortgage balance, which will be paid off well before my wife retires.
I have an IRA that should outlast me and then would go to my wife or my son if she doesn't outlast it. My wife has a pension plan and 401(k), which should grow some more before she retires.
If you have an emergency fund, your assets outweigh your liabilities, and you have low or no debt, then you might not need life insurance to pay final expenses (burial or whatever) and help support the surviving spouse.
If you do get life insurance, be sure to get term life insurance. I would suggest a 10-year level pay plan. In about 3 years or so, you will break even and will be paying less than an annual renewable plan's premiums would be by then. That rate on the 10-year plan will continue for the other 6 or 7 years beyond the break-even date. With an annual renewable plan, your premiums would go up every year. That way, they start out at less than the 10-year plan but soon exceed those premiums with the renewal rates. Research it well and good luck with your decision.
The KEY question is what are you insuring? Normally, when young one buys term life insurance to appropriate $$$ to be used to support, supplement one's family needs after they're gone. Some seniors buy small policies, when resources are inadequate, to cover end of life expenses, ie funeral, payoff current obligations, etc,
Then again, some use life insurance in estate planning to produce $$$ for heirs as payment is direct to beneficiaries and typically those $$$ are tax free.