Insure you've got enough to live on
Q: I've had a term life insurance policy since I was 21, and now I am 35. What is your view on this manner?
A: My view is that you only need life insurance if you have someone to leave the money to, someone who depends on your life, your income. Otherwise, the money is better put into a retirement account where it will grow tax-deferred. And you should know what KIND of policy you have -- term life? Then go to www.accuquote.com -- and check on current costs for $100,000 or more of term life. Prices have dropped dramatically in the past ten years. You're probably paying way too much if you have an older policy. As long as you're insurable -- healthy -- you could probably take out a new, far less expensive policy.
Q:My wife and I are both 62 and have had extended care insurance since age 55. Our American Express Policy currently would provide us with $107.21 of coverage per day or a total of $39,131.65 per year. Do you think we should carry more coverage than this? We are both in very good health as of this time.
A: Every little bit helps! I don't know if you have inflation protection with your policy, and that's important. Or how long the coverage lasts -- 3 years, lifetime? And I'm assuming you're both covered with this policy. So, right now, if you needed care it would pay for about half the care you need. I would NEVER give up on this existing policy -- it's surely priced better than any new policy you could buy. And I don't know what you have in the way of other assets. If you want to check on the cost of an additional policy call 800-522-6242 -- Maga LTC. You can use my name, or not, as I don't get anything out of this, and you'll get great service either way. I'm glad you have some coverage, wise decision -- and you need to put the cost of an additional policy in context of your overall financial picture.
Terry Savage is a registered investment advisor and the author of the newly published The Savage Number: How Much Money Do You Need To Retire? (256 pages, Wiley, $24.95).
