Sound Out!
You ask, we sound out!
Question:
Shannah, I don’t have anyone else depending on me financially, so why would I need life insurance? I’m curious about this because I had asked my retirement program advisors (TIAA-CREF), and was told that, no, I actually didn’t need it.
Answer:
Again, this is a great question.
In order to answer this question whether I agree or disagree I would need to know your age, what kind of health are you in, do you have parents that are alive or brothers and sisters, do you have any charities you favor, and what are your future plans. Do you plan on getting married, starting a business, getting another job? Also, do you save money and approximately how much do you save?
You see, life insurance can do many things. One, it can protect your loved ones against future loss. It can dissolve any debt you have at your death so no one is left with that when you die. It can provide a method through which you can save a significant amount of money. It can also provide a way for you to get tax free income. It can provide monies to pay off a mortgage in event you own or buy a house. These are just a few examples of the value of life insurance. However until I know more about your situation it is difficult to give you an objective response. Life insurance is a “customized” purchase. It can be tailored to meet many different needs and requires a personalized analysis to weigh the pros vs. cons.
I look forward to assisting you with this question!
Response:
Hmm…It’s been a few years since I got the previous advice. Here goes!
- 50 years old
- In most ways, health is fair.
- Parents deceased. Each died of cancer
- Two siblings, all in reasonably good health.
- Charities are important to me
- I have 12years left in a 15-year mortgage.
- No marriage plans, no plans to start a business. No real plans, per se, beyond paying off the house and eventually buying another vehicle. If/when I retire, I hope to do some volunteer work and maybe get a low-paying job in an art gallery or some other quiet place.
- I’ve worked at a university. If I change jobs, it likely would be within the university, so benefits, retirement, and seniority would be unaffected. Even if I’m new to a dept., layoffs would affect someone w/fewer years.
- Retirement plan through TIAA-CREF, though I’m rather cautious, so it isn’t a large amount.
- Other than retirement, my savings is through a credit union. It’s lower than I like right now, but payroll deduction builds it back. Until the past two months, I’ve been paying off my credit card monthly for years.
- I make about $40,000/year and am my own sole support
Answer:
Thank you again for your honest question. I wish more people would speak up with their questions.
I have taken some time to review your answers. Unless you have a burning desire to leave additional monies to your siblings or a charity, you may well not need life insurance. If your health is fair it may be difficult to purchase life insurance since premiums and approvals are heavily based on your age and build. If you could get life insurance, the costs could be prohibitive. My suggestion instead would be to focus on your retirement planning to gain as much growth as you are comfortable with prior to retirement. Make sure you have your beneficiaries in order as well because this is what many people tend to ignore.
However, it sounds like you are a great example for other women: you have retirement, you have a savings account, you support yourself, and you have kept your debt under control. Congrats!
Response:
Shannah, you are so kind to make this effort! Also I appreciate that you aren’t trying to sell me something I don’t need.
Who would be a good person to ask if “To my estate” is sufficient for the beneficiary designation?
Thanks bunches for your research and advice.
If you would like to submit a “Sound Out”, please email your question to shannah@slcinsuranceservices.com.
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© 2008 Stanley L Compton Insurance Services, Inc.
Stanley L. Compton, CLU, RHU Ca. license #0B61029 | Shannah L. Compton, MBA Ca. license #0F29932