Is it ever a good idea to cancel or terminate a life insurance policy?

My wife and I are ready to retire debt-free. When does it make sense not to have life insurance? Or, should you always have life insurance?

Retirement, Life Insurance
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5 days ago
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There are definitely individuals and families that may reach a point where life insurance is no longer required or necessary. However, this is a very personal decision and in my experience, is based entirely on a discussion of cash flow. If you've already retired and your cash flow covers all of your expenses both now and those anticipated in the future, there is a possibility that the need for life insurance has expired. This is not a statement indicating that you should cancel the insurance, but you can make a calculation that will help you determine whether in fact it still "needed". Assuming you've covered yourself with long-term care insurance and your cash flow is adequate to cover both current and anticipated expenses in the future, you might want to hire a fee-only financial advisor on a project basis to help you determine if the insurance is needed for the future. Nobody in their right mind is going to tell you to "cancel" your policy. What they may do is tell you that in their professional judgment, the policy is no longer required to meet your needs. It will then be up to you to determine whether in fact to cancel the policy. Let me carry this one step further. Assuming you are still paying premiums, whether it's term insurance or cash value insurance, you might want to ask your children whether they'd like to keep the policy in force by picking up the premiums at their expense. If they agree and actually want to keep the policy in force, he would name them the beneficiary rather than your spouse and you would have no further financial responsibility for the maintenance of the policy. Again, I think some professional help would be worthwhile. I hope this helps and good luck.

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