Should we keep paying on life insurance?
My husband and I are retired, we both receive nice pensions, and we owe $46,000 on our home. This is our only debt. I’m 65, he is 82, and we have more than $800,000 in variable annuities, along with substantial cash in savings. We also have $200,000 combined in life insurance coverage. If we cancel these two policies we can pay down an extra $10,000 a year on the house. Should we cancel the life insurance policies?
Dear Dave,
My husband and I are retired, we both receive nice pensions, and we owe $46,000 on our home. This is our only debt. I'm 65, he is 82, and we have more than $800,000 in variable annuities, along with substantial cash in savings. We also have $200,000 combined in life insurance coverage. If we cancel these two policies we can pay down an extra $10,000 a year on the house. Should we cancel the life insurance policies?
Anna
Dear Anna,
At 82 and 65, you probably won't be able to get any more insurance at a decent price. If you get rid of it, you're going to be without it. The good news is that you have enough money through your pensions, investments, and savings to be what is known as "self-insured."
If I'm in your situation, I'd drop the life insurance policies and pay off the house as quickly as possible. Make sure you keep a good health insurance policy in place, because a hospital stay can eat your savings alive. I hope you have long-term care insurance, too.
Good question, Anna. You guys have done a great job with your money!
-Dave
Dave Ramsey is America's trusted voice on money and business. He has authored five New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover,EntreLeadership and Smart Money Smart Kids. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.