Thanks for the additional thoughts. I know I explained things sort of clinically and coldly, but DH and his ex-wife are very realistic about these things and we often talk about the possibilities of the future. When you have a kid like this, you DO need to be very practical. For example, when she turns 18 next year, she'll need to be adopted by us (her mother is bowing out), otherwise, she'll become a ward of the state and we don't want that to happen. WE want to make the decisions about where she'll live and who will care for her, not leave that up to the state. That's not to say that this isn't an emotional decision for DH, as has been pointed out. It certainly is, however, DH has had to remove himself from some of the emotion to make these decisions. The funeral is already planned, right down to who is doing what at the service - precisely so they don't have to worry about making those decisions when emotions are running high. There won't be a squabble about the finances, because we pay for everything as it is, even though step-daughter lives with her mother...we'll pay every last dime of the funeral, just as we'll pay every last dime of her existence until that point, and will do the same for step-son's college. That's just a given, since ex-wife has no money whatsoever (there was never any alimony required when they divorced, additionally she remarried before DH and I got married). Even though we foot the bill, in the interest of keeping the peace and out of respect for the kids, we do take ex-wife's opinions into consideration and more often than not, decisions are made jointly. As suggested, I guess I'll tell DH to decide if we do more research into insurance or pay the premium for this year and see where that takes us. We do expect the premium to go up every year and no, we have no idea of what life expectancy looks like. It could be next week or it could be several years. Sorry, looks like I've rambled a bit but wanted to provide a bit more context for the question. Thank you.

This being a fairly long thread, I'll answer a couple of points from ole joyful on behalf of the OP (but if I've gotten anything wrong, pls do correct me - I'm going on memory here, having contributed several times): >>This was term insurance/most are guaranteed renewals ... but usually at a substantially increased annual fee. >> No. This was an offer from the US Government. It is an unlimited term policy, which is unheard of from a private carrier. The premium remains the same in perpetuity, until the policyholder dies or allows the policy to lapse. >>If he could delay purchasing, until a time when people depended on him financially, he could (but - would he have?) invest the value of the premium for a few years until his need developed. >> The annual premium is a MAXIMUM of $365/yr and a minimum of $3.20/yr. I don't think there's an investment on this earth that would turn even the $365 maximum amount in a five- or ten-year period, into enough money to purchase a lifetime of premiums for a $400,000 30-yr Level Term policy on a male who is ratable for occupation and may by that time be ratable medically as well. Being ratable for occupation normally means a premium penalty from 40-150% in annual cost. The federal government is offering to insure this young man for: - The same premium a highly-rated A+ private carrier would charge to a healthy, non-smoking, "low-risk occupation" for $400K face amount - But instead of a 30-yr Level Term that would go up dramatically at age 54**, this policy remains in force and the premium remains the same, forever. ** For those that are not conversant with Level Term, the premium remains the same for the set number of years, but after that jumps so high (because you are now 10, 20, or 30 yrs older) that everybody drops the policy. So you want to have the term policy last until you have no need for it any longer. How high does it go? Well, after the Level Term period expires, it becomes an Annual Renewable Term policy, which is what ole joyful is referring to. For example, on a $250K policy I purchased on a 15-yr Level Term, I was rated standard for health, no rating for occupation. My premium is currently $600/yr. At the end of the 15 yr term, the annual premium jumps to $4,525, the year after that $4,912, then $5,360, etc. etc. Therefore, I will allow the policy to lapse at the end of the Level Term period.

Hi Moni, Whole life covers one for the rest of one's life ... and, as they say, builds cash value. But the cash value relates to the lower price of insuring one while young, with the actual annual costs rising as one ages, resulting in the cash value decreasing as one gets old. One can borrow against the cash value, resulting in a cost for interest. It is my understanding that the cash value disappears when one dies: one then gets only the death benefit that was guaranteed. You can have the cash value, or the death benefit ... but not both. Term insurance covers the life insured for a specified number of years, e.g. 10 years, 20 years, etc., usually for the full face value, but I think that, though seldom used, decreasing term is available, where the payout rate diminishes as the years in that contract period go by. As one ages, the possibility of one's dying during the period of the next term increases, so the price quoted rises, very substantially as one ages. It becomes very difficult, if not impossible, to initiate any policy for a person over age 80. As Iva Mae says, in Canada "Term to 100" is available, to cover one until age 100. It may cover one beyond that, but I suspect that the coverage dies on one's 100th birthday: if it's claimed that such isn't so, I'd want it in writing. Ordinarily, over one's lifetime, a fanily's need for insurance decreases, being for a large amount when young, if there's a family, to pay off mortgage (and I don't like insurance just to cover mortgage), and provide the surviving spouse and small children with their needs until they become independent, probably including at least part of the cost of advanced education. As one ages, the need reduces, so, while the premiums for a specified amount of term insurance increases, the amount that the family needs to carry reduces, thus they can continue to pay less for term than for whole life with the difference available for investment. The idea then is that the amount of one's invested asset increases over the years, thus reducing the amount needed to support the family's needs. The goal is to have enough assets built up over the years to be able to self-finance, thus being able to do without term insurance late in life, when it becomes very expensive. Thus, we often hear the saying, "Buy term (when young) and invest the difference (between the cost of whole life that stays constant through the years and term, which increases as each term expires). ole joyful

The basic service provided by life insurance is to replace an income: to provide the income (or service) provided by the insured in life, throughout the period of need of the dependents. The amount that one needs depends on the financial needs which the family has: in the case of the income-provider, to provide the income that the wage earner provided. I agree that it is wise to carry coverage on a SAHM, as well ... for, as several have said, a SAHM provides several services which will need to be replaced, and usually paid for, following her death Some needs are to pay off debts, including credit card, car loan, mortgage, etc., the major priority being the rate of interest being paid relative to the rate of return that may be obtained on investing the proceeds of the insurance. The main one is usually mortgage, whether immediately or over a number of years, the choice of which to use depending largely on the expected rate of return that the survivor can develop on the fund that would have been used to pay it immediately, related to the rate being paid on the mortgage - and including tax considerations on each. Many insurance companies have sold whole life, or permanent, insurance, over the years, which covers the insured until death and builds up cash values, due to the premium being higher than is needed to cover the cost of coverage in the the early years. The concept of whole-life insurance troubles many of us, as it's quite expensive. Many recommend term insurance, which runs for a given number of years, then expires. Many carry renewable term, to ensure that at the end of that term, they will be able to buy for another term ... sometimes/usually without a new medical test being required. In those situations, as the possibility of death is low in early years, the premium rates in the early years is low, then escalates in later terms, when the possibility of death during that term increases. The total need is largest then, as there will need to be assets in place that will provide an income for the survivors to provide for their ongoing needs ... which in the case of a young family will include surviving non-income-earning spouse and the young children through the years as they grow, then at least part of their advanced education. Will the former SAHM continue to stay at home, or will she go out to earn an income? Is she equipped to obtain an income which will provide a net return, above the extra costs that will be incurred? As the children grow, in the case of Mom will she join the work-force? Will she need re-education in order to do this efficiently? As the years go by, current needs usually increase for a time, which children are growing - but as years pass, the total amount neede to meet the family's needs will decrease. Thus, many families arrange for a total amount of coverage to reduce "reducing term", as the price per unit of insurance increases as the person insured ages. Once the offspring are on their own, what will Mom's income needs be? Will she be able to earn enough to live in the manner to which she had expected/become accustomed? How capable is the survivor of managing money wisely? Will s/he be able to manage it well? Some would fritter such an unaccustomed large amount away, and be destitute within a few years. In such a case, perhaps it would be well to invest much of the proceeds of the insurance into an annuity, to provide ongoing stable income ... but the rate of payout usually depends rather heavily on the rates of interest available at the time it is set up ... which will not be altered later. That would have been much better in the early '80s, when Canada Savings Bonds (briefly) paid 19% ... but not so hot in current low-interest-rate conditions. Especially since many feel that, with the huge debts being carried in our economic environment, and the lack of private savings, and with recent disruptions in the financial markets to cope with, there is almost a certainty that interest rates will soon rise, probably substantially. I have to go, as I need to do some things ... but this will help you consider soe of the parameters involved, I hope. Good wishes as you make your plans. ole joyful P.S. One other major, major issue ... don't forget the ravages that inflation will wreak on your asset base and future costs. Many retirees who forgot to factor in that problem have lived to *regret* that overloooked situation ... which usually more strongly affects people who choose to invest their assets where their future asset (and, less so, income level) is guaranteed). You want guarantees ... there's usually costs. o j