RetireJapan

After the hospital/operation/general anesthetic thing last week my wife said something interesting. She would feel more comfortable having some life insurance to bridge the gap between something happening to me and getting control of my investment accounts.

I currently administer hers too, which makes the situation worse.

Is anyone doing something similar? I'm guessing a cheap term life policy for 5-10m yen would be plenty to cover a year or so including funeral and extraordinary expenses.

Any recommendations?

Or just increase your emergency funds? I can't see it taking her longer than a year to get control of your accounts (likely much shorter than this) so if she has one year's worth of cash then she should be OK.

northSaver wrote: ↑Tue Aug 22, 2023 1:21 am Or just increase your emergency funds? I can't see it taking her longer than a year to get control of your accounts (likely much shorter than this) so if she has one year's worth of cash then she should be OK.

This is the answer. Hold 6-12 months' expenses in yen.

TokyoBoglehead wrote: ↑Tue Aug 22, 2023 3:25 am

northSaver wrote: ↑Tue Aug 22, 2023 1:21 am Or just increase your emergency funds? I can't see it taking her longer than a year to get control of your accounts (likely much shorter than this) so if she has one year's worth of cash then she should be OK.

This is the answer. Hold 6-12 months' expenses in yen.

I'm not so sure about that.

Rough back of the envelope calculation:

Monthly cost of 10m term life insurance: 3,000 yen
Opportunity cost of holding 10m yen in cash instead of investing it for ten years assuming 7% return: 10m yen (80,000 yen a month)

Or am I missing something here?

RetireJapan wrote: ↑Tue Aug 22, 2023 3:53 am

TokyoBoglehead wrote: ↑Tue Aug 22, 2023 3:25 am

northSaver wrote: ↑Tue Aug 22, 2023 1:21 am Or just increase your emergency funds? I can't see it taking her longer than a year to get control of your accounts (likely much shorter than this) so if she has one year's worth of cash then she should be OK.

This is the answer. Hold 6-12 months' expenses in yen.

I'm not so sure about that.

Rough back of the envelope calculation:

Monthly cost of 10m term life insurance: 3,000 yen
Opportunity cost of holding 10m yen in cash instead of investing it for ten years assuming 7% return: 10m yen (80,000 yen a month)

Or am I missing something here?

Did you find a policy that will insure you, at your age and current health, for 3000 yen a month for 10 million yen?

My portfolio is cash/equities so it is a normal allocation in my opinion.

You also hold 20% bonds. Those certainly are not seeing 7% a year. Perhaps reduce that position and hold some as cash?

You're still young, so your math works.

But not a long term solution? Price term life as if you were 60, 65, etc., to see if it works then.

If it's that cheap then yeah, go for it You would only have to make 360,000 yen on your investment over 10 years to break even.
So in answer to your original question... no, I don't have any insurance company recommendations, sorry.

captainspoke wrote: ↑Tue Aug 22, 2023 4:16 am You're still young, so your math works.

But not a long term solution? Price term life as if you were 60, 65, etc., to see if it works then.

Yeah, this is a short term solution for the next ten years.

In ten years time my wife will start getting nenkin, we'll likely not have her business any more, and I'm planning to increase our cash holdings

TokyoBoglehead wrote: ↑Tue Aug 22, 2023 4:16 am Did you find a policy that will insure you, at your age and current health, for 3000 yen a month for 10 million yen?

Yeah, just checked kakaku.com quickly.

But they were all coming out around that level.

Seems like a no-brainer, at least for the next ten years.

RetireJapan wrote: ↑Tue Aug 22, 2023 1:04 am She would feel more comfortable having some life insurance to bridge the gap between something happening to me and getting control of my investment accounts.

I pay a small premium each month for 収入保障保険, to be paid to my partner.

Been doing so for close to 10 years now.

This is not specific to death expenses though, but indeed one does wonder how fast the payout would come… i think there was an option to get the payout as a lump sum or in monthly installments..

Main benefit is a little peace of mind for my partner.