Don’t “self-insure” your life

Many people take the notion of “self-insuring” when they go into retirement by canceling life insurance policies.  We find that people that had life insurance through work that is automatically canceled when they leave their job, but then I find people canceling their life insurance that they own in their own name, not through their employer, but in their own name at retirement. 

I’m not saying that this is one of those terrible marketing ideas that was brought in by financial planning, I’m just saying it’s not the wisest choice at this point in your life.  Upon retirement, most people are told that they don’t need their life insurance anymore because they can cancel it, and because they can now self-insure themselves.  So, think about it, a person is taking the risk from multi-billion-dollar companies, and they are now placing the risk upon themselves at exactly the point in time that they have an increased chance in dying.  What are the odds of dying between the ages of 0 and 65?  It’s actually in the single digits.  When a person is still alive at the age of 65, what are the chances of dying from that point on?  The chance of dying is 100%. 

Upon retiring, most people are told that they don’t need their life insurance anymore so they can cancel it again to be self-insured.  This isn’t the origin of the problem.  The actual origin came when that person was lead down a path to buy only term insurance their whole working life, just to be sure that it is canceled when they should actually want it the most.  If you truly knew the economics of life insurance, you would want every bit of it that you could get upon retirement, and the permanent kind that they say the advisors and representatives out there that they say is expensive.  By not having permanent life insurance, you don’t have a permission slip that provides you the options to leverage your assets.  Instead, you are having to self-insure yourself.  Your assets now have to be your lifetime income, your lifetime legacy and liquidity for your retirement, and for the ones that you want to share your life with.  It is now all on you because that responsibility and risk has been taken off of the multi-billion-dollar companies.

Just think of it this way, if you completely paid off your house, would you cancel your home owners insurance?  If you completely paid off your car, would you cancel your automobile insurance?  So, don’t do that to yourself when you have hit retirement.  Read my book, talk to us at our office.  We can meet virtually so you can be shown the leveraging opportunities by owning permanent whole life insurance into retirement and the opportunities that it can provide for you to live a fuller and happier life in retirement.



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