Tuesday is insurance day… and it just so happens that insurance happens to also be a place where I discovered I could cut back on expenses. Here is how I figured out I needed to change some of my life insurance products.

I am 57 and as I followed the advice I am suggesting here at the blog, I reviewed my insurance policies for life insurance. What I discovered was that I have a policy that has a cash value if I end the policy. Now that is not always the case with a policy nor do I encourage you to cash in the policy without reviewing and researching the possibilities, penalties, and the consequences. I also never encourage you to cash out a policy without having a backup policy in place.

Here is what works for me. I researched and discovered that my policy ends at the age of 70. Yes, that’s right, who knew that a life insurance policy has an expiration date. That fact may have been explained to me at age 30 when I took the policy out and maybe 70 sounded like an eternity so it didn’t matter. But today at age 57, closer to 70 than 30, it doesn’t sound good. It would mean that at 70 which is only 13 years away, I would need to have everything paid in full, enough in the bank to pay for a funeral, and money to share with all the kids and the grandkids. With my current income and expenses, that is clearly not going to happen.

So I have shopped around, found a policy that has more coverage, less monthly premium, and an expiration date of age 80. Not good, but better. ( I clearly want to live to at least 96, the same age my beloved grandmother lived to) so I feel I must make the change. I have paid the first month’s premium and as soon as I get the policy in my hand, my next phone call will be to cash in the other policy.

Why not keep both? The cost of paying on a policy that expires in 13 years when I am healthy and without any medical issues seems expensive. The cash I receive back will payoff a debt, thereby freeing up that payment to cover the new insurance with some left over for debt reduction.

This is why it is important to re-evaluate your insurance policies frequently, at least  once every 10 years. See what it is costing you and what is still provides. Your assignment this week is to research your policies and make certain that they still are applicable to your current situation.  It may behoove you to make a change.