I am about to turn 65. I want to leave husband money for funeral , plot and headstone if I die first. I have osteoporosis, type two diabetes, diabetic retinopathy. Is it better to spend money on an insurance policy or try to find investments that pay more than we are getting from bank Accounts and CDs?
I'd either invest the money for later or prepay. I wouldn't buy life insurance, per the comments already listed.
Talk with a Financial Advisor who can discuss your options. Before you meet you need to determine how much money you would need in today's dollars. The planner can help you calculate how much you need to put aside each month to meet your goal. If you go this route you could die before enough money has been accumulated.
Another option is to prepay for your funeral. That is fairly common where I live. Seniors pay monthly to the funeral home. You hope to have paid off the funeral before you need it. My mother has done this. You can also buy your plot ahead of time or in your case, you and your dh can buy side by side plots now.
If you put away $100 every month into some type of investment that earns an average of 7% interest (after fees), at the end of 10 years, you will have more than $17,000. If you put away $50 a month in the same type of investment, you will have more than $8,000. You will not get this kind of return with a CD or a regular savings account, it will need to be an investment which comes with risk. Depending on your tolerance for risk, you may or may not like to do this.
I suggest you talk to a couple of investment advisors to get more information. If you're in the US, i recommend you go to
daveramsey.com, then go to Dave Recommends and look under Investing for recommended investment advisors.
Dave Ramsey is a very popular radio talk show host that advises people on saving money and getting out of debt. He only recommends businesses that are reputable and ethical, and which he uses himself.
Do you actually have $ to invest and with risk?
Those inexpensive payout (10k-25k) policies that are on TV & tout paying for funeral costs almost always have a period of time before full policy is in force. Couple of folks have posted on this on AC. Theirs were 5 & 7 years. So you would have to live and pay on policy for 5 or 7 full years in order to get the full benefit.
Most folks stop paying before the required 5 or 7 and that’s all profit for the insurer.
If I had to look for insurance with the existing health issues you have, I’d look to get a term policy that is offered through an organization that I do or could belong to. Like a University alumni organization, or a professional associations or even AAA. Some employers have insurers that offer policies to retired employees. These have bigger # of participants so can spread out risk = lower premiums with a better rated company. But realize at your age, every year the premium will go up & significantly. Most small policies do not build up cash reserves, so if you stop paying, it will be all for naught.
Oh also if anyone mentions ability for doing “life settlement”. Imo to get any settlement to be worthwhile you’d need a policy at at least 250k (500k better) and you’d need to be able to sell it as a viatical settlement to an investor. Not the Wentworth types.