That's what I would do given the situation. And I wouldn't say you're cutting losses. You did protect your family during the child-rearing years, the primary purpose for life insurance.

quote:

Originally posted by kkina:

quote:

Originally posted by Fly-Sig:
We had Universal life which is essentially whole life. When I cashed it in there were various fees and adjustments which resulted in paying out only about half the stated cash value!

Cash value seems to be something much different than one would think it is.

That does seem low. Was it half the cash value or half the coverage amount (i.e. face value)?

Cash value

quote:

Originally posted by Fly-Sig:

quote:

Originally posted by kkina:

quote:

Originally posted by Fly-Sig:
We had Universal life which is essentially whole life. When I cashed it in there were various fees and adjustments which resulted in paying out only about half the stated cash value!

Cash value seems to be something much different than one would think it is.

That does seem low. Was it half the cash value or half the coverage amount (i.e. face value)?

Cash value

Dang. Was it a newer policy with large surrender charges still in effect?

quote:

Originally posted by PHPaul:
RE: CoolRich and kkiina above

So, I'm 73, all my income is in the form of pensions, I have no debt beyond a car payment and no mortgage.

Sounds to me like I should cut my losses and cancel my policy, take whatever I can get in the way of cash value and save/invest the $100/month premiums.

Is that about right?

Yes, that's what I would do. You have no longer have an income stream to protect with insurance.

And, with the money you save, you can start window shopping at the tractor store.

Just like any kind of insurance, homeowners, auto or health. If the bad thing you are afraid of doesn't happen then all the premium bought was peace of mind. (Yes I know whole life is sold as an "investment", not a good one in my mind)

To the OP, I would echo the sentiments of what most folks here are saying.

My wife and I both worked. Once we reached a point where we could self-insure, we dropped all life insurance. Now retired, our income streams include retirement accounts along with interest & dividends plus social security.

If you have enough, set aside, for final expenses (you and spouse), I don't believe you need to continue life insurance. It's done its job; let it go. Use those payments for something else.

I believe the only life insurance I currently have is some term policy provided automatically through my credit union you get just by joining.

Done and done. Mailed off the surrender documents for my policy this morning.

Insurance is like gambling in a casino - the odds always favor the house, or they wouldn't be in business.

quote:

Originally posted by PHPaul:
Done and done. Mailed off the surrender documents for my policy this morning.

Probably a good move, OTOH you could take the cash value and see if you can convert it to a single premium policy with a death benefit of $5K or $10K.

Plenty of companies offer this, NYL-AARP, Globe Life, Liberty National, etc. If the cash value isn't something you need to survive, and, if you want to provide the costs for your final expenses, probate, anything that your wife might have to deal with post death.

You can also get a joint-survivor policy that will insure you both for final expenses etc, it can make life a lot easier dealing with that time for either. A paid up policy is what it's called after you pay the initial first premium, and since you are getting cash value its really not out of pocket expenses.

I will caution, that nobody told you that when you cancel this, if you do decide to buy new insurance you'll have a 2 year contestability time, anything happens in the first two years most of these will pay back only the premiums + 10% in that time. Some have full medical reviews and may pay the benefit, but it takes a full medical investigation.

So converting it to a paid up lower value policy is best done vs cancelling and doing a new issue because you have zero start up restrictions. If say in a year you come up with a malady and it becomes terminal, then the existing policy, or if you convert it with the same carrier you skip that 2 year waiting period.

Otherwise, maybe take the cash and buy a new project bulldozer, motorcycle, boat

Cash on hand and savings will more than cover final expenses. The cash value of the two policies, about $10k, will go right in joint savings.

There's a reason Life Insurance companies have those nice big downtown buildings and can sponsor golf tournaments.

quote:

Originally posted by kkina:

Dang. Was it a newer policy with large surrender charges still in effect?

No, it was a 30+ yr old policy. Iirc the cash value was more than the original death benefit. The death benefit was quite a bit more, too, being the original plus cash value.

Licensed agent here. I do mostly final expense, so whole life for $25k or less, largely to a demographic that has a fanatical belief in taking the funeral cost burden off their kids' shoulders.

If people read their paperwork, I'd be out of business. And not because I sell anything deceptive. I'm independent and can write for any non-captive carrier. A good chunk of my business is fixing the jams others have gotten into .... because they did not read their paperwork. Perfectly healthy people buying an overpriced policy with a two yr wait, people getting by on nothing but $900/mo Soc. Sec. in a term policy that will skyrocket upon renewal and they'll be forced to drop it, and on and on.

BTW, when you see the words "flexible" and "adjustable," what do you think will happen (adjust) to that policy if you make the minimum (flexible) payment the agent quotes you?

Anyone out there wants me to take a look at what you have and explain it in layman's terms, I'm happy to do so. No sales pitch. I'm likely not licensed in your state. But I can let you know what you have and what's going to happen with it.