23 Apr We’re in our 70s. Can we afford life insurance?

Q. My husband, almost 71, and myself, almost 70, have term life insurance policies that will expire in about six months. Our premiums are $467 quarterly for $500,000 of coverage for my husband and $189 quarterly for $300,000 of coverage on me. We spoke to our agent about continuing coverage but it’s too expensive. We are both on various medications but are healthy. When you see TV commercials for policies, they look too good to be true. What should we do?
— Playing it safe

A. Your dilemma is not uncommon among older folks: You want to keep insurance in force, but the premiums are costly as you age.

Before you start looking at new policies, see if the current policies have a conversion rider, said Paul Criscione, a certified financial planner with Freedom Capital Management in Colts Neck.

“This rider may allow you to convert a portion of your policies into a permanent policy, although the cost may still be prohibitive,” he said.

Life insurance premiums can vary, but Criscione said you’re right about being skeptical. You’ll need to check the fine print on any policy, whether you find it advertised on television or not.

One option could be to buy multiple term policies for small amounts to limit the premiums, Criscione said.

But the real issue you should consider is whether you actually need the insurance.

“Life insurance is meant to protect your dependents from loss of income and debts when you die,” he said.

For income replacement purposes, the calculation is normally ten times the salary of the breadwinner, he said. If insurance is to cover a non-working spouse, normally half the coverage of the working spouse is needed.

But right now, it’s not clear that you need the insurance to replace income.

You’ll want to look at your liabilities, such as a mortgage, outstanding bills or dependent children. Look at your other income sources, and see if they can cover expenses for the surviving spouse.

If they can, you may not need the insurance after all – unless you want to leave an inheritance.

Consider sitting down with a financial planner who can look at your overall finances and help you determine whether you really need the insurance, how much you may need and what your budget can afford.

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This story was originally published on April 23, 2019.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.