Question: We are both 54 years old, professionals, still working. We own our home and have no debt beyond $30,000 in a home equity loan from building our home. We have about $200,000 in savings and plan to work at least part time for several years. He has a government pension, we will both have SS income (if its till solvent!) We each have term life insurance but they are getting expensive (his for $400,000, mine $75,000). Is it really important to have insurance at this time? We have no other dependents. Pam, Jeffersonville, VT

Answer: You are at a good age to evaluate your need for life insurance. You have little debt, lots of savings, and good pensions. You plan on working even during retirement, which means your savings can compound longer. (And Social Security will be there when you decide to tap into it.) You have no children or parents to worry about.

Now, you're still young. I don't have a magic number to suggest how much you should cut back. I would consider if it makes sense to look into whether you should enjoy equal financial protection from the death of the other instead of the wide disparity in coverage you have now. There are a number of life insurance calculators on the web. They're simple but they give you some guidance, and you can find one here and another here.

Here is a thought for your calculations that makes sense to me: You should each have enough life insurance so that if one of you dies the other doesn't have to worry about money for a period of time. The survivor can take a year or more--you decide--to deal with their grief, without worrying about earning an income, paying down debts or draining the savings account.

Again, your savings may be enough. But I'd also think about factoring in a bit of mad money into the calculation, a sum to try something new, to pursue a dream. When a loved one dies it painfully reminds us of our own mortality. Like Woody Allen said, "Life isn't a dress rehearsal--it's reality."

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