At What Age Should You Cancel Life Insurance?
Knowing when to cancel your life insurance policy is a personal decision that depends on your financial situation. Here are some scenarios that may signal it’s time to stop your policy:
|You have no dependents||Cancel your policy|
|You have paid off your mortgage or helped with your children’s student loans||Cancel your policy|
|You have children who are financially independent||Cancel your policy|
|You have dependents who rely on you financially||Keep your policy|
While there isn’t a specific age at which life insurance is no longer worth it, it may be worth keeping your policy after the age of 65 if you have dependents who rely on you financially. However, your financial situation may be different from when you first signed up for your policy.
If you’re over 65 and no longer need your policy, you can surrender it, let it lapse, or sell it through a life settlement (if you qualify). Here’s how these methods differ:
- Surrendering your policy means giving up coverage but not receiving any payout.
- Letting your policy lapse means coverage ends and you won’t receive any payout.
- Selling your policy through a life settlement means receiving a lump sum payment from a third party in exchange for the policy.
Term life insurance policies end at the end of the time period agreed upon at the start of the policy. Whole life insurance policies do not expire at a certain age but can end through cancelation, a lapse, a life settlement, or in a death benefit payout to beneficiaries.
If you have employer-provided life insurance, you can keep the coverage after you retire, but your premiums may increase since you’re no longer on a group payment plan.
Ultimately, the decision to cancel your life insurance policy should be made with the guidance of your insurance provider and financial advisor. If you qualify for a life settlement, it may be a way to reduce your monthly payments and receive cash in your pocket. Contact us today to learn more.