Should Older Couples Shed Term Life Insurance?

Dear Insurance Adviser,

My husband and I are retired or close to it. We are 62, and we have no dependents and no debt. Our retirement savings are adequate. We have term life insurance of $300,000 each. Is it worth it to continue that?

-- Debt-Free and Dubious

Dear Debt-Free, I don't believe in car insurance if you no longer own a car. Similarly, I don't believe in life insurance if you have no one financially dependent on you.

That being said, because you have the policies currently in force and they probably have a price guarantee for a few more years, I would probably recommend keeping them at least until the guarantee ends. Find out also if they are convertible to permanent life insurance and what the final conversion date is, in case you need insurance beyond the end of the price guarantee.

You used the word "adequate" in describing your financial circumstances. "Adequate" in my vernacular usually means "getting by." If that's all you're doing, the $300,000 you currently have in life insurance would probably come in handy to the survivor. "Comfortable" is nicer.

If you have outgrown your life insurance needs, consider investing in long-term care insurance. You're both at an ideal age to start such a policy before it gets too expensive. Chances are great that one of you will end up needing long-term care for at least six months or more. Without a policy, you will end up spending down your assets to get federal Medicaid coverage for the care you need.

I recommend that you meet with a long-term care insurance specialist and ask about your state's partnership program. It would allow you to protect assets and still get government assistance with long-term care.

All the best as you review those term life insurance policies and your overall insurance needs!

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