MetLife - Life Paid-up at Age 98

[cbruce15]

Hi

The link below is my uncle's MetLife Policy:



My uncle is 70s and he pays $25,480 annual premium for 17 years. Could anyone answer the questions below?

1) Does my uncle need to pay $25,480 annually until age of 98?
2) If yes, could he use "paid-up status" option to reduce some death benefit, but no more future premium?
3) He received the dividend for $9,893.45 from 2017 to 2018, but the cost for this policy from 2017 to 2018 is only about $2,100. Will the dividend cover the cost of this policy in the future?
4) Do you suggest switching this policy to GUL if my uncle is still healthy?

Because my uncle's insurance agent is passed away already. Metlife does not answer my questions and ask me to check with agent, but the new agent is not that trustworthy. Therefore, just ask these questions here and hope someone can help. Thank you.

 

[Lloyds of Lubbock]

1.Maybe.
He can use dividends to reduce premiums, the 25k is the contractual premium.
2.Yes you can.
3.He probably used dividends and additions to pay a portion of the premium.
There seems to be enough additions in the policy to pay the premium.
He is purchasing equity additions, which are different than a regular paid up add.
Get a copy of the contract, these were not all that popular, it seems like it did well at least last year. How old is the policy?
4. Maybe. Get a single premium GUL illustration using the cash value to see how much db you can buy
You should get an inforce illustration showing:
A reduced paid up scenario
An immediate offset scenario
A full pay...its good to have.
Good luck!

 

[cbruce15]

Thanks for your info. The policy was issued in Aug in 2002, so this policy is more than 17 years.
I will see if I can help my uncle to get the enforce illustration.

1.Maybe.
He can use dividends to reduce premiums, the 25k is the contractual premium.
2.Yes you can.
3.He probably used dividends and additions to pay a portion of the premium.
There seems to be enough additions in the policy to pay the premium.
He is purchasing equity additions, which are different than a regular paid up add.
Get a copy of the contract, these were not all that popular, it seems like it did well at least last year. How old is the policy?
4. Maybe. Get a single premium GUL illustration using the cash value to see how much db you can buy
You should get an inforce illustration showing:
A reduced paid up scenario
An immediate offset scenario
A full pay...its good to have.
Good luck!

 

[Lloyds of Lubbock]

Good luck with that.
This policy seems to have performed well.

 

[DayTimer]

Do you suggest switching this policy to GUL if my uncle is still healthy?

The following is my personal opinion:

I would never suggest replacing a 17 year old whole life policy with a GUL. I, personally would not replace a whole life with a UL of any stripe for anyone. I would certainly not replace a high quality policy like this one for anything for someone in his or her 70's other than possibly with a 10 pay life.

What is the concern that prompted your questions?

 

[Lloyds of Lubbock]

Getting info and actually replacing are two different things.
While I do not suggest replacement, I think it is prudent to know your options.
As there is already a mistrust between the client and his assigned agent, getting all options out in the open is probably a good idea.
Getting someone to explain what he actually gives up, will be another step
In reality it is his uncles policy and his decision.

 

[cbruce15]

What is the concern that prompted your questions? That is my first question “does my uncle need to pay $25,480 annually until age 98”? This policy seems not the new custom whole life and I heard the old whole life policy is designed to pay the premium for the entire life. The cash value of this policy looks good now, but I don’t know if my uncle still needs to keep paying in order to keep it. He is 70s and just want to see if he can stop the payment. That is the reason I bring out if he can select paid-up status option or just switch to single premium GUL. That way he may sacrifice the death benefit a bit, but he can keep the policy without any future premium. My uncle is wealthy and his kids are independent already. He does not need the cash value of this policy for his retirement and probably will just let his kids to inherit the death benefit without paying income tax.

 

[Allen Trent]

I would suggest you try to find a fee only life insurance counselor to pay to get the exact details.

The problem with seeking other agents like ourselves is that some may be looking for a way to turn this into a new sale. Getting the exact options of the current policy like others have mentioned.

Met Life has millions of policies, but very few agents anymore. Those agents that are around likely are focused on writing new policies to make a living or servicing their clients, not servicing other clients. Doesnt seem right, but it is just the way it tends to be.

Met Life headquarters are required to answer your direct questions. Put them in writing & if they dont answer, file a complaint with the state insurance commissioner.

My personal advice is to pay the full premium as long as you can as it will build the policy up as much as possible. However, if he is having trouble paying the full premium, ask how you can direct the annual dividend to pay toward the premium & he could pay the difference. If that amount is still too much, ask if you can not only change the dividend to reduce the premium, but also surrender the PUAR values or equity additions to cover the balance of the annual premium. As a last resort if no premiums can be paid, you could elect a reduced paid up policy.

Looks like the policy is doing very well. As of 2018 the death benefit had grown from the original $1M to $1.4M and the Cash value is almost $600,000

Good luck. Take it slow

 

[pfg1]

What is the concern that prompted your questions? That is my first question “does my uncle need to pay $25,480 annually until age 98”? This policy seems not the new custom whole life and I heard the old whole life policy is designed to pay the premium for the entire life. The cash value of this policy looks good now, but I don’t know if my uncle still needs to keep paying in order to keep it. He is 70s and just want to see if he can stop the payment. That is the reason I bring out if he can select paid-up status option or just switch to single premium GUL. That way he may sacrifice the death benefit a bit, but he can keep the policy without any future premium. My uncle is wealthy and his kids are independent already. He does not need the cash value of this policy for his retirement and probably will just let his kids to inherit the death benefit without paying income tax.

This is all the more reason to keep paying it.
If you look at the return year over year at this point (and going fwd) he's exponentially growing any $ he pays in, and it comes out tax free...and doing it with no risk.

IMO, its a very good policy - and agree with the others, do your due diligence. Personally, I can't see there being a reason to replace it based on what you said, and its highly doubtful any policy could create a better scenario. Even if it goes reduced paid up, it will still grow nicely. Just not as fast as it is now with each premium paid. Good luck!

 

[DayTimer]

The problem with seeking other agents like ourselves is that some may be looking for a way to turn this into a new sale.

That is one reason I asked what prompted the concern to begin with as I tyhought perhaps an agent suggested replacement with a GUL which would strike me as self-serving on the agent's part.

I don’t know if my uncle still needs to keep paying in order to keep it. He is 70s and just want to see if he can stop the payment.

Is this you or your uncle who has this concern. What do his children think. I know I'd not be too happy if my cousin were trying to talk my dad out of his cash value life insurance policy.

This i s a very valuable policy. It sounds as though you may not fully understand the value of this policy and @Allen Trent's suggestion that you consult a fee-only insurance advisor may be your best bet to making a well-informed decision.

If your Uncle is wealthy and, as you said, healthy, this policy may in the future be the only thing that allows his children an inheritance at all. Consider what a change in administration, especially if a wealth tax proponent is elected, might do to your uncle's wealth upon his passing.

If he can afford the premium with no detriment to his lifestyle, I'd advise him o keep the policy and keep investing the premium each year.