Our insurance premiums are a budget-buster, what can we do?

LR writes:

My husband is 53 and I am 46. We rent our home and have no dependents. We both have some debt that we are trying to pay off. We recently purchased life insurance so if something happend to one of us, the other wouldn't be burdened with debt payments. We took out policies for $250K and $450K but the monthly premium is $600 and it is consuming a significant amount of our income. I think we may have acted out of fear and I think we should be planning for a healthy future instead of death. What is your opinion?

The desire to protect one spouse from being burdened by debt in the event of the unexpected death of the other spouse is certainly understandable, but since the premiums for these policies are testing your budget, I think it is time to sit down with a licensed agent and re-evaluate your needs and your coverage.

You don't mention exactly how much you owe, but I am guessing that your debts are not in the range of $700K so it is very possible that less insurance is one option. Also, since the premiums are $600 per month, I am guessing that you do not have term life insurance policies. At your ages, and assuming good health, term policies in the amounts you mentioned would probably be closer to $600 per year, not $600 per month. So it is very possible that you could reduce your premiums significantly by going with term insurance. Since you don't have any dependents, term insurance may very well meet your needs, which at this point seems to consist primarily of debt elimination. If you think you would be able to eliminate this debt in a few years using on-going cash flow, then you have only a temporary need for insurance and term insurance could be your best bet.