When to cut back on life insurance

WUPW - Gary from Rossford asks, "when can you start to cut back on life insurance, if you ever do?"

Michelle Henry from Generations Financial Group says cutting back on life insurance is a personal choice. Some may decide they just don't need it anymore.

"Because the wealth that they have built and saved and invested over a lifetime is such that they look at it and say, I'm not going to need anymore money than this, my children/beneficiaries aren't gonna need anymore money than this, so I really don't need the life insurance," Henry said.

So, some just find that paying the premium isn't worth it anymore.

On the other hand, the death benefit of a life insurance policy has tax advantages. The money goes to your beneficiaries tax-free, giving life insurance another big advantage over other types of investments.

In other words, even if you think you have plenty to leave behind, once Uncle Sam gets his share, it might not be so much.

Henry says instead of cutting back, you may even want to consider adding more. If there's money in another investment that you don't think you would ever end up needing, you can take that and invest it in a paid-up policy.

This would buy more in death benefit and would go to your beneficiary tax-free as opposed to leaving it in another investment that would be subject to taxes, therefore, leaving more, just by making the transfer.