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How to Maximize Life Insurance Benefits and be Cost Effective
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Retirement Planning
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Rank: Rookie
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Joined: 11/30/2007(UTC)
Posts: 33
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I am 51 and plan on retiring in 5-8 years. I currently have basic life insurance, which I have had since I started 27 years ago. I am trying to figure out the most cost effective way to take advantage of the life insurance benefits. It appears that I want to keep the basic insurance (1x rate of pay plus $200) for the rest of my life. It looks like the best way to go is take the 75% reduction plan. If I go this way, do my premiums drop to $0 the day I retire or do they stay the same (33 cents per thousand per month) until I turn 65? Either way, at this point, it seems like a relative bargain.
The Option A for $10,000 is a little more complicated, but it still seems like a reasonable investment at the 75% reduction rate. Basically, I pay $4.33/mo until I turn 60 (about $300) plus another $780 between 60 and 65 ($13x12x5), for a $2500 pay out to my heirs.
Thank you
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Rank: Senior Member
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Joined: 6/30/2009(UTC) Posts: 441   Location: the moral high ground Thanks: 5 times
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You pay the Basic Premium until age 65. The Basic, 75% reduction plan is a good deal. I would look at Option A a little different than as a 'reasonable investment'. I would do the calculation to include the 27 years sunk cost to age 51 then look at another 14 years of premiums for a $2500 pay out. p.s. In the year 2060 a Snickers bar will cost $2,500 and your heirs are gonna say "what a gyp!" Edited by user Tuesday, February 16, 2021 4:18:50 PM(UTC)
| Reason: added a important post script |
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How to Maximize Life Insurance Benefits and be Cost Effective
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