Submitted by rhox13 t3_ym7v60 in personalfinance
My mother in law is in her early 60s and has a 20 year Term Life Insurance that is expiring in 2 years.
She wants to get a new policy to gift the payout to her adult children when she passes. My wife, her brother, and myself are all in our late 20s/early 30s and are financially stable and don't "need" the money. But my MIL wants it to be a "last gift" to leave for her children and to pay off her after-death expenses.
Her rate options include:
Term Life Insurance at $372/month for 25 years for a payout of $300,000
Term Life Insurance at $608/month for 25 years for a payout of $500,000
Is this a smart financial decision for her? What are the things we need to consider?
EDIT: What about for whole life insurance? Could anybody provide some more detailed explanation so that I can convince her it's a bad idea? She also thinks that this is a viable "investment strategy" because she was told she could get a ~6% return