Hi friends,
I asked about this topic previously, and didn’t get any replies, but I’ve done some more research, and also, can phrase it as more of a philosophical query. Do I really need life insurance?
My husband has a life insurance policy that his parents made him take out when he started working. It’s a whole-life policy with a Type B death benefit. It costs us $60/month, and has a cash value of about $5,500, with a base death benefit of $80,000. I am pretty tired of having to fork over $60/month when there are other things out there that he could be investing in, like his Roth IRA or a regular taxable investment account.
Should we cash out this policy and put the money somewhere else?
Here is what’s making me think that cashing out is a good idea:
- We have no children at the moment and will not have any in the future. (He practically raised his little brother and I’m the oldest of four; we are done with child-rearing)
- Our house is about two, maybe two and a half years from being paid off.
- We have no consumer debt.
- I work for a university, while he works for a local engineering firm doing property right-of-ways and half the IT work in the office. Our jobs are about as stable as jobs can get.
- I have supplemental life insurance through my job to the tune of two times my annual salary.
- We are the beneficiaries of one another’s retirement accounts and all that kind of stuff.
It’s my understanding that life insurance is set up to replace your salary and support your family if you were to die. Unless there’s some angle to it that I am missing.
Given what I’ve laid out for you here, should we keep this life insurance policy and continue to pay into it, or should we cash it out, put the money in his Roth IRA, and continue to contribute the $60/month toward that?
Any advice is most welcome. I’m also planning on asking our accountant when we go to get our taxes done on Monday.
switch2richnow 