You should stop buying term life insurance once your financial goals are met. If you are debt free, no loved one depends on your income, or your business would thrive without you, then it is probably time to stop buying term life insurance. It may also be time to consider either converting or purchasing cash value life insurance to protect your insurability and to have the flexibility to use the cash value funds for other things such as retirement or an unforeseen critical illness.
Every agent most likely has their opinion on when you should stop buying term insurance. One situation where I often recommend skipping term, and going with permanent, is when you are older.
While term policies often have a conversion feature, so that you may convert your term policy to whole or universal life, there is a time and/or age limit on how long you have to use that option. Most policies must be converted by age 75 at the latest...some must be converted many years before that.
Therefore, if you 60 years old, buying a 10 year term policy that must be converted by age 65, you have essentially bought a policy that will become unaffordable at age 70, with no other option than to go hunting for a new policy. While your options are much more limited at age 70, you also run a high risk of developing some type of health condition by the time you are 70, further reducing your choices and hiking prices.
This does not hold true for everyone....some older people just want enough short term life insurance to cover loans or other reasons. But many older folks regret not biting the bullet when they were working, and paying extra to get their life insurance set up for life.
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While term policies often have a conversion feature, so that you may convert your term policy to whole or universal life, there is a time and/or age limit on how long you have to use that option. Most policies must be converted by age 75 at the latest...some must be converted many years before that.
Therefore, if you 60 years old, buying a 10 year term policy that must be converted by age 65, you have essentially bought a policy that will become unaffordable at age 70, with no other option than to go hunting for a new policy. While your options are much more limited at age 70, you also run a high risk of developing some type of health condition by the time you are 70, further reducing your choices and hiking prices.
This does not hold true for everyone....some older people just want enough short term life insurance to cover loans or other reasons. But many older folks regret not biting the bullet when they were working, and paying extra to get their life insurance set up for life.