Life insurance tip. Put some cash aside for your bereavement party and use the annual life insurance premium you would have paid to take an extra vacation while you still can. Examine the policy fine print. Many policies guarantee you that they will insure you forever, but they often do not guarantee the annual premium you must pay, which is the most substantive part of the policy.
Insurance companies like AARP have massive direct mail campaigns to persuade seniors to purchase life insurance. Once you are on their list, you get quantities of unsolicited mail. For the record, I recently purchased a $50,000 life insurance policy for a premium of $225 per month or $2,700 per year. It was probably a mistake and I will no doubt cancel at the next premium increase.
It is perhaps better to set $10,000 of cash aside for a bereavement party and a modest funeral, than bet against the insurance companies actuarial statistics. Insurance company's bet that you will live. Just bet with them and not buy the insurance. Clear?
They have the right to raise the premium every 5 years. My guess is that when I am 85, the premium will be $10,000 per year. At the rate they can raise the annual premium and if I live to be 90, I will have paid them over $100,000 and they will still only pay out $50,000. I can only win if I die in the next few years.
Insurance companies, bless their little actuarial hearts, are profit directed corporations that capture wheelbarrows of cash. Insurance companies argue they help seniors build estate wealth after death. If you are worth more when you die, than while you are alive you likely have to much life insurance.
Of course when you are young and have young children, the bet is different. However, when you are a senior, the purchase of life insurance deserves extra careful almost sceptical examination. Put some cash aside for the funeral and use the annual premium you would have paid to take an extra vacation while you still can. It is a tip not a rule.
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