Why I Believe Every Married NYSTRS Teacher Needs at least $1,000,000 in Life Insurance

Your Pension is very valuable.

This isn’t really a big secret, but did you know it could have a value of over $1,457,726!

Now you can’t actually receive $1,457,726 but according to www.immediateannuities.com, that is how much a 55-year-old would need to pay to generate $60,000 a year for their and their spouse’s life to replicate this income from an immediate annuity.*

.…but if you were to pass away before retiring, your family may only receive up to 3x your salary. You can view your in-service death benefit amount on page 2 of your NYSTRS Benefit profile.

Hypothetical Example:

For a teacher making $70,000 per year that passes away, the family might receive $210,000 instead of the NYSTRS pension with its potential value of $1,400,000.

That’s over a $1,000,000 difference!

The main point here is that there is a risk present that many aren’t aware of. If you die before you file for benefits, the value of that pension could drastically decrease for your spouse and family.

This is why I recommend at least $1,000,000 of life insurance term coverage until the NYSTRS teacher retires just to help protect the pension. If you have children, you likely need even more!

What does it cost for $1,000,000 of coverage?

                                          Age                                             Female                                                 Male

                       35 (20 years of coverage)                 $31 to $58 a month                         $37 to $75 a month

                       40 (15 years of coverage)                 $37 to $71 a month                         $50 to $80 a month

                       45 (10 years of coverage)                 $47 to $77 a month                         $58 to $95 a month

                       50 (10 years of coverage)                 $69 to $115 a month                       $79 to $155 a month

Obviously the healthier you are the lower the cost will be. These quotes assume a non-smoker living in NY as of 5/10/2021.

As you can see, these costs are very reasonable to protect a NYSTRS pension while you are still working.

After all, how would you feel if your house was worth $1,400,000 but only insured for $200,000? I know I would be nervous.

This example is for illustrative purposes only. Actual results will vary. The information shown is hypothetical, does not reflect actual results, and is not a guarantee of future results.

*An immediate annuity is a contract between an investor and an insurance company, with the investor paying the insurance company a lump sum in exchange for regular income payments. Those income payments may be paid monthly, quarterly, semi-annually or annually, and are generally guaranteed to last as long as the contract holder is alive.

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