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Life & Health Insurance/Life Insur for Surviving Spouse

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Question
I have a life insurance question, please.  Heres my situation. Husband is on Soc Sec Disability (has no pension) for a chronic condition, although not life-threatening. He is 60.  I am 57 and retiring in June from a state job. I will get a lifetime annuity state pension that we can get by on combined with his SSD.  I carry $100k of life insurance through my employer.  My retirement options are straight life (where I get the whole amt with nothing going to my spouse if he outlives me); 50% joint survivor where hed get half my pension upon my demise; 100% joint survivor where hed get my full pension upon my demise.  Realistically, we need the full amount of my pension, plus if I outlive him, Id need the full amount. The survivor options take too much of the pension monthly.  My thinking is to take my full pension with no survivor benefits and keep my $100k life insurance policy for my husband should he outlive me.  I realize the rates go up as I get older. Is there any other type of life insurance I should shop for? We have no burial expenses because we have donated our bodies to medical science. Our house is paid for. I worry about his survival if he outlives me. Any suggestions or guidance would be welcomed! Thank you.

Answer
Thanks to our financial problems over the past five years yours is not unique.  The pie is finite, the only options rob Peter to pay Paul.  

First lets talk about life expectancy.  To start your Husband is three years your senior, second it's common knowledge females outlive males by almost nine years.  So ignoring health statistically you can expect to live twelve years past him.  You are concerned with HIS wellbeing should you predecease him.  Also you state you will need just about all you will receive after retirement to maintain yourselves.  So from day one electing either a joint or survivor option will leave you short.  

Perhaps NOT including him in your annuity would, in the end, be best.  I say that because you will be adequate for the time you all will both be alive, and the time will be of a greater quality.  No matter what upon eithers demise the survivor will have to take a pretty good hit.  In your case you will loss his SSD, and while you will not have to deal with his expenses bottom line is very likely going to be most difficult.  So IMHO I'd recommend taking the straight annuity.  

Two things I can suggest.  You mention your home is mortgage free.  In a couple of years, when he is 62 you would be eligible.  Without getting to technical a reverse mortgage could give you a firm monthly income.  Even a few hundred dollars a month can make a huge difference.  There is no real concern because as housing values increase it offsets the equity taken to live on.  In fact I suspect ten or fifteen years down the road you may be able to recast that mortgage to take better advantage of increased equity.

Lastly is your husband a Veteran?  The draft ended right around the time he turned 18.  If he is a Vet contact the VA.  You may find there are benefits he can apply for.  Again not a fortune, but if he qualified for benefits equal to even a couple hundred bucks it's well worth it.  

Someone, a mentor, once told me "People do not fail by thousands of dollars a month, it's very often two or three hundred which makes the difference between just squeaking by and a more rewarding and pleasant life"

Feel free to get back to me with questions you may want to discuss.  

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David Clark

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Questions relating to Life, Health Insurance, Annuities (all)

Experience

I've been in the business since 1975, I ran my own agency in New Jersey from 1980 to 1998. I now am a semi-retired sole practitioner in South Florida.

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CLU Courses, no designation. LUTC, more seminars then I could count.

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