Life Insurance Rule of Thumb for Amount ?
Is there any rule of thumb as to the amount of Life Insurance to carry as the IRA grows? And who should own the policy? I currently have only $100K term and my daughter owns the policy.
As the IRA holder matures in age, are there Life Insurance companies that specialize in policies for 70+ age IRA savers?
Permalink Submitted by Al Fry on Tue, 2008-08-19 22:31
The life insurance one carries is not necessarily tied to an IRA. It should be based on an overall needs analysis, taking into account many factors, such as need for income, debts, estate taxes, inheritance taxes, college expenses, final expense estimate, type of health coverage one has, etc.
Permalink Submitted by BruceM on Thu, 2008-08-21 07:33
I agree with the foregoing explanation.
LI is a determined need. The two most common reasons are to replace household income when a wage earner unexpectedly dies, or to provide liquidity (needed cash) in an illiquid estate that requires cash to pay final bills, medical costs or estate tax. Does one of these fit your need?
And who is the beneficiary of your LI policy held by your daughter?
Unless there is some obsucre reason I’ve never thought of, the size of your IRA should have nothing to do with a LI policy.
And there are any number of LI salesman who’d be happy to sell you a LI policy at any age….but the underwriter may be a different story.
BruceM