So 10 years ago DH and I bought our first life insurance when we had our first child. I bought a 25 year term for both of us. $500k for me and $2m for DH. Our premiums? $243/year for $500k for me. I was 30 and DH was 32. His was $1098/year. After 10 years of payments I have paid $2430 and $10,980 for peace of mind. It sort of bites to think I have spent that much but what if something happened? Or worse? What if something happens in the next 15 years?
As it stands I don't have more on myself but I have another super cheap $2m on DH through work. It's so cheap that we buy it. Might as well. Extra insurance. I have a large mortgage now and I still am not working full time.
But seeing these numbers makes me wonder if I should consider cancelling it? For sure I'll be happy when it's done. It sort of coincides with my DK2 finishing theoretically college if she finishes in 4 years. We'll be retiring so it should be great timing. But at that time we'll have paid around $25k for DH and $5k for me.
Should we cancel it?
10 years in
December 13th, 2019 at 08:19 pm
December 13th, 2019 at 08:55 pm 1576270523
Insurance is something we hope to never collect!
You are buying peace of mind.
December 13th, 2019 at 09:04 pm 1576271081
December 13th, 2019 at 10:47 pm 1576277241
December 14th, 2019 at 12:54 am 1576284882
The sunk cost is irrelevant. Insurance is something we all pay for and hope to never use. That's the whole point. It doesn't matter what you're spending over the term period.
If you have a large mortgage and a child who still has college ahead and you can't afford to fund all of that from your own income, then you need to insure his life.
Ignore the cost of the policy. Think about how you would manage financially if he died tomorrow. Could you maintain your current lifestyle, pay the mortgage, put your kid through college, and retire comfortably? It sounds like the answer is no, so keep that insurance until the answer to all of those questions becomes no.
December 14th, 2019 at 10:16 pm 1576361778