Cash Value Increased Less Than Premium

[deanbrew]

OK. I'm back and finally have an answer that makes (some) sense, after waiting over two weeks for my insurance agent to hear from Lafayette Life. The explanation is that our January 2014 Annual Reports were prepared the day after the premium was posted to our accounts, and the CV and DB included payment of the premium. In contrast, my January 2015 Annual Reports did not include new premium payments because I hadn't paid them yet.

The further explanation is that the CV and DB are both still increasing by more than the premium amount and our 2015 Annual Reports would have shown that if we had made the payments by the preparation date.

Question 1: Does this make sense to you insurance experts?

I'm still not completely sure whether we should keep funding my wife's policy. She has plenty of life insurance, including another policy, and we could really use the money elsewhere. Or I can pull the money from an investment account to pay the premium, and consider this life insurance policy as a reasonable alternative to bonds (as in not equities) in our investment portfolio.

Question 2: Do you consider life insurance CV to be similar to bonds when looking at someone's investment portfolio in terms of asset allocation?

 

[Golfnut2112]

I think you answered your own question. If your wife does not need the insurance, why keep it especially if you need to withdraw money from an investment account to pay the premium.
I also do not think it is similar to a bond in terms of performance unless the bond is ultra short term in duration.

 

[WinoBlues]

OK. I'm back and finally have an answer that makes (some) sense, after waiting over two weeks for my insurance agent to hear from Lafayette Life. The explanation is that our January 2014 Annual Reports were prepared the day after the premium was posted to our accounts, and the CV and DB included payment of the premium. In contrast, my January 2015 Annual Reports did not include new premium payments because I hadn't paid them yet.

The further explanation is that the CV and DB are both still increasing by more than the premium amount and our 2015 Annual Reports would have shown that if we had made the payments by the preparation date.

Question 1: Does this make sense to you insurance experts?

I'm still not completely sure whether we should keep funding my wife's policy. She has plenty of life insurance, including another policy, and we could really use the money elsewhere. Or I can pull the money from an investment account to pay the premium, and consider this life insurance policy as a reasonable alternative to bonds (as in not equities) in our investment portfolio.

Question 2: Do you consider life insurance CV to be similar to bonds when looking at someone's investment portfolio in terms of asset allocation?

Order the inforces and look at the numbers. Only you can answer if an option is correct for you.