The number one reason people take out life insurance is as financial protection for their young families in case they die earlier than expected. Most people also start thinking about cancelling their life insurance policies once the kids are all grown up and independent - but should they?
Before you cancel your insurance policy, think about the following:
Do your grandchildren need financial support?
Do you want to protect assets from market volatility?
Is it a possibility your spouse outlives your retirement savings after you have died?
Would an income gap such as reduction of pension or Social Security benefits compromise your spouse’s standard of living when you die.
Can you afford losing the tax advantages life insurance carries?
Do you want to burden heirs with "death" taxes?
Do you and your spouse gave enough to cover each others funeral expenses ?
Do you worry about leaving your spouse with end-of-life medical bills.
Do you want to pass on assets as well as an insurance payout?
Do you want to make a charitable gift on your death to your alma mater or favorite charity?
If the answers you gave to any of the above gave you reason think carefully about ending your life insurance policy, talk with a financial advisor.