"Unemployed but still need insurance because of my child."

Reader says...

I am 48 this year. I have a child, a girl age 9. 

I have lost my job for almost a year. 

I also have a life whole life insurance policy that is over 20 years. 





As I have no job at the moment, I am thinking of terminating it to help my cash flow.

You may say that my girl and my spouse need the death coverage but I am currently also paying for a term insurance of $1 million on my life with only death benefit. 

I feel that this should be sufficient for my family should I leave this world before them.

If you were in my shoes, what would you advise yourself? Thank you.

AK says...

I believe you have thought this over carefully.

I would also suggest that you find out how much a term life insurance for a smaller amount of say $500,000 might cost for your age for the next 12 years. 

This is an idea with your girl in mind. 





She will be age 21 in 12 years' time and will probably be able to take care of herself by then.

Ask about a reducing term which is less costly.

 A reducing term basically sees coverage reducing over the years. 

In this case, 12 years. 

Of course, the cost of such an insurance policy should also reduce over the years. 

You might even decide at some point that you don't need that $1m term life insurance.







"I am still of the opinion that we need insurance but we do not want to overpay for insurance. If I had known this in my younger days, I would not have bought whole life insurance or endowment products when I was in NS and as a fresh graduate."

Source: Comments Section of "Free ILP or Term Life?"





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1. Free ILPs or Term Life?
2. Consider terminating whole life policies.
3. Why buy term? How much to buy?