Life insurance vs inheritance

[smalldog]

Mrs smalldog would like us to take our some comprehensive life insurance in order to ensure our young (pre-school aged) children are financially set through to university in the case the worst happens.

However - we are already financially comfortable enough that any inheritance in the case of this awful occurrence would be more than enough to see the kids safely from now through to adulthood.

In this case, is a life insurance policy money well spent or a just an unnecessary extra cost? Can a well written in Japan Will do the job, assuming they can access our bank accounts, investment accounts, property portfolio via an appointed guardian under the Japanese system?

I appreciate life insurance + inheritance would mean “more” money in the case we weren’t around - but I don’t think they need that much.

Appreciate others thoughts/insight on this.

[Beaglehound]

Might be one of those situations where it isn't strictly necessary but would give your missus peace of mind, so worth doing. She may worry especially that she might be left alone to deal with everything should you pass, and the extra safety net would be welcome in these circumstances.

[RetireJapan]

Wrote about this last year: https://www.retirejapan.com/blog/life-i ... ter-death/

I haven't gotten around to sorting this out yet, but Daniel (my co-host on RetireJapanTV) has.

[smalldog]

Thank you - interesting reading your thought process, maybe a small plan which can enjoy tax deduction status will keep Mrs smalldog happy and I can “enjoy” another deduction come tax return time.

[captainspoke]

Cheapest/easiest might be term insurance thru your employer. In my case, private school mutual aid assn, but I think most any 厚生 system would have it. It does get more expensive as you age (not level term, if you've heard of that), but no salespersons involved, etc.

Only catch is that signup is yearly, in the autumn (November, IIRC) so you have to ready to pull the trigger on it then. But once set up, it continues until you opt out (which I did when our kids were grown).

[adamu]

I'm guessing it will be easier to get life insurance to pay out. Doesn't need to be a lot but if it's enough to live on for a year while sorting out the inheritance...

[northSaver]

On the other hand... Insurance: A Tax on People who are Bad at Math?

Maybe get Mrs smalldog to read this before comitting to anything

[Nancy]

I think that in general, financial advisors do recommend life insurance if you have small children. The idea is that you only need it buy it through to their adulthood and then can reevaluate. A friend's husband died all of a sudden, and everything was in her husband's name. He had a large portfolio of stocks etc. but it took her 2 to 3 months to be able to access everything. She really suffered during this time because she felt that she didn't have enough to pay her bills or even buy food. It was really stressful. I know that life insurance companies exist to make money for themselves, but depending on the situation, a policy can really be a life saver. I know that it won't be thought of as a good choice on this website, but I have bought US dollar life insurance policies through the bank for Manulife and Prudential. They paid about 2 to 4% interest a year, and after 10 years, or when the policy comes to term (if you don't die), you get the original deposit, plus the 10 year interest. If you do die, and amount is substantially more.

[Tsumitate Wrestler]

I think that in general, financial advisors do recommend life insurance if you have small children. The idea is that you only need it buy it through to their adulthood and then can reevaluate. A friend's husband died all of a sudden, and everything was in her husband's name. He had a large portfolio of stocks etc. but it took her 2 to 3 months to be able to access everything. She really suffered during this time because she felt that she didn't have enough to pay her bills or even buy food. It was really stressful. I know that life insurance companies exist to make money for themselves, but depending on the situation, a policy can really be a life saver. I know that it won't be thought of as a good choice on this website, but I have bought US dollar life insurance policies through the bank for Manulife and Prudential. They paid about 2 to 4% interest a year, and after 10 years, or when the policy comes to term (if you don't die), you get the original deposit, plus the 10 year interest. If you do die, and amount is substantially more.

Someone with kids, or a non-working spouse should DEFINITELY have insurance (just not whole life).

Term life is very flexible and affordable, and doesn't include the poorly structured annuity annex that wholelife does.

My wife and I both have it, however we both work, and plan to cancel when the kids are colleges age.

(The point of the policy for us was to pay for childcare, schooling in the event one partner passes)

[Deep Blue]

]

Someone with kids, or a non-working spouse should DEFINITELY have insurance (just not whole life).

I have both a non working spouse and children, but feel no take to take out insurance - we just have car insurance and more recently bicycle insurance.