Life insurance is like a parachute. There are no second chances if you need it and don’t have it.
But life situations and finances change all of the time. Here are four reasons why you should cancel or downgrade life insurance coverage.
The average middle-aged American pays anywhere between $60 to $80 monthly for life insurance premiums.
If you are getting divorced or don’t have children, you can cancel your policy or have it updated to remove your former spouse as a beneficiary.
Divorce can be a stress-inducing and emotionally traumatic process to endure, so it can be easy to forget about such things. Make a list of important documents that you need to update after a divorce so you don’t forget.
Supplemental income conversion
The typical human being lives to age 80. However, due to current advances in medicine and medical technology people are living longer lives.
So that means the longer that you live the more expensive medical treatment becomes if you require it.
The average retired couple needs $400,000 to pay for medical care throughout their retirement. Medical expenses are usually added in retirement fund planning because they can be so unpredictably high.
Medicare only offers annual medical benefits of $11,600.
If you have a life insurance policy of significant financial value, some or all of it can be converted into supplemental income, depending on policy conditions. You can then give yourself a regular income to help pay medical expenses.
Over 22% of Americans over age 50 owe $336 billion in student loans. And many of them assumed student loan burden on behalf of their adult children or grandchildren.
Millions of senior citizens are going bankrupt or having their Social Security benefits garnished to repay student loans.
Many senior-aged parents with adult children pay all of their children’s bills. Almost 80% of elderly parents pay all of the bills of their adult children, even at serious financial peril.
Senior citizen parents go bankrupt or endanger their retirement plans by paying the bills of adult children.
If you have adult children who have children of their own and can take care of themselves, you could remove them as beneficiaries from a life insurance policy. You can then convert the policy into a supplemental income.
If you have grown children who can’t take care of themselves you are better off teaching them financial responsibility than continually endangering your own financial future.
You found a cheaper policy
A life insurance policy does not need to be a brand loyalty product unless you make it one. Like any other product you buy, you should regularly comparison shop online for better deals.
If you can downgrade and get a cheaper policy that suits your needs, then do so.