So I am 55 years old and will be here 33 years soon. I have always purchased GUL equal to 5 X my Salary. I'd like to retire in next 5-7 years but wonder what my options are for Life Insurance then.
Retirees out there....what did you do?
8 replies (most recent on top)
I was paying 99.00 / mo. For Honeywell group life. Before 59 I was paying 48.00/ mo. I called snd fudcyo my age they increased premium. I called around and got the same coverage for 63.00/mo. For 20 years that puts me at 80. After host I'm praying For the rapture
The theory of decreasing responsibility says as you get closer to retirment and the kids are gone you should need little to no life insurance and instead have cash i.e. 401k or pension. Personally I would not pay for life insurance after I retire it is too expensive for what you get. Now if you did not save enough having just enough life insurance to bury yourself may be appropriate...but remeber...cremation is only about $3k.
Thanks for all of the feedback!
Also agree with others here. After retiring, chose not to continue the costly life insurance thru carriers offered by Honeywell. Have sufficient investments, savings, and low debt so that life insurance is not worth the cost. Social Security benefits will begin soon. Pension is set up so spouse gets a set percentage if I precede her in death. Good health insurance through spouse employer (which will be continued after she retires) so will not have to worry about leaving high medical bills behind.
we saw the end of employment coming and 3 years ago purchased level term insurance on the open market for MUCH less than GUL. I took severance this year and am early-retired now, and will hold the term insurance until I can take SS. At that point, my wife will be fine in retirement with SS survivor's benefits and investments.
I agree with the earlier posts; work to position yourself to where you do not need insurance in retirement. I recently left Honeywell at ~age 60 and there were two insurance options offered when severance pay expired. One is prohibitively expensive and the other is just very expensive.
1) Convert the employee-paid insurance that Honeywell provided: ~$51 per year per $1000 of insurance, plus a $100 annual fee. Rate increases every year, to approximately $90 at age 70
2) Continue the optional insurance that you are paying for now. Approximately $6 per year per $1000 of insurance. Continuing your spouse's coverage looked to be slightly higher.
Note sure why anyone would consider option 1. You should see that Option 2 is somewhere around 60% higher than the rates you are paying now at age 55. I opted for neither and am working for a new employer whose insurance rates are ~40% lower than the rates Minnesota Life charges for the optional Honeywell group insurance.
I retired from Honeywell Aero a year ago, after 35 years and I agree with input from -1oqw.
If retirment is planned properly, your kids college expenses should be paid off and the kids leading their own lives and careers. Your mortgage, car loans and credit card debt, etc. should be paid off, and there should be little to no need for paying rediculously high life insurance premiums if you die as your wife/significant other will be well taken care of by your pension, 401k, IRA, taxable accounts and HSA savings. any "death insurance", like $50k or less, should cover the celebration of life party held by your survivors.
Congratulations on your 33 years of service and good luck in your retirment!
Are you getting life insurance because you really need it, or are you getting it "just because"? Life insurance should be called "death insurance" because that's what it is.
Do you have dependents who rely on your income? If no, then no need to have insurance. That is my situation and while still employed at Honeywell I dropped my coverage to the $50,000 level at which no imputed income enters my income tax calculation. After my employment ended, I got a form offering to continue life insurance coverage which I didn't bother to read.
If you have a spouse who needs your income, then you should also consider other sources, such as electing to have a reduced pension in exchange for having it continue past your death. Also a spouse could continue to receive your social security benefit after you die.