Should I Cancel My Whole Life Policy?

Which is a terrible ROI....he would be better off buying term.

What's 50k going to be worth in 50 years? 10k in today's dollars?

Buy convertible term...if you need it, you can make it permanent. If not, you can drop it.

Or better yet, get a Protective policy with a decreasing DB after the level period as opposed to a reentry option.

He'll need to be worth 11m+ indexed for inflation for this to be an estate issue.

Just work harder if you're worried about paying for your funeral at 70.

Sorry.. But you are assuming there are certainties in life.. Work harder? What if the car accident at age 50 or the cancer at 60 leaves him disabled.. Now he can convert his term but possibly at a price he can't afford. Could be invested in the market but when he needs the money, we have just had a black Monday.. Yeah, it might come back but he can't wait because he needs the money now so he gets back less than he put in. He loses his heath insurance and then is hit with a major illness.. The bills force him to spend all he has. He has invested in a business of his own but then the business takes a sever downturn becasue of changing markets, material shortage, etc. Only permanent life insurance can guarantee a set amount of money at a specific point in time or on the occasion of a specific event. Oh, an your estimate of the estate tax floor 48 years from now is pure speculation. It is based on current law which is subject to change at the whim of the legislature. If the income redistributors ever get majority control, you can bet it will change.
 
Sorry.. But you are assuming there are certainties in life.. Work harder? What if the car accident at age 50 or the cancer at 60 leaves him disabled.. Now he can convert his term but possibly at a price he can't afford. Could be invested in the market but when he needs the money, we have just had a black Monday.. Yeah, it might come back but he can't wait because he needs the money now so he gets back less than he put in. He loses his heath insurance and then is hit with a major illness.. The bills force him to spend all he has. He has invested in a business of his own but then the business takes a sever downturn becasue of changing markets, material shortage, etc. Only permanent life insurance can guarantee a set amount of money at a specific point in time or on the occasion of a specific event. Oh, an your estimate of the estate tax floor 48 years from now is pure speculation. It is based on current law which is subject to change at the whim of the legislature. If the income redistributors ever get majority control, you can bet it will change.

DI can cover nearly every one of those unfortunate circumstances.

Sure, speculation on estate taxes but it is such a nominal amount in 50 years, what effect would it even have?

I didn't mean to come off as flip, but at his age, if the choice is between this policy and term, the term likely provides much more value to him and his future family.

He could always have both...
 
Guardian and maybe some of the other companies perhaps use to allow an exchange of an existing policy into one of their policies. It might be posssible to move these policies into something much more attractive. Does anyone know if this is still possible. Where is BTNRS?
 
To much speculation. What an "in force" is a printout of how your policy is doing in terms of its actual cash value.

Without more information it's difficult to make a judgement in your behalf. Is air paying dividends. Probably but we don't know. Is it possible that it could become paid up earlier? meaning you no longer pay premiums? Good chance but no one can tell without seeing the policy.

You can tax free loans I guess but as to how much and to do it correctly you need a agent who can read whole life. Most of these agents here can do it.

Term and invest the difference? Yeh but most people don't invest the extra money. Plus we're not really talking about that large a policy that that cash you free up is a big difference.

If you saw the price difference on larger policies between Whole Life and Term you would see what "invest the difference" can really mean. There's WAY more money involved.

Maybe State Farm has an insurance specialist you can talk to? The agent who sold the policy is clueless.
 
To much speculation. What an "in force" is a printout of how your policy is doing in terms of its actual cash value. Without more information it's difficult to make a judgement in your behalf. Is air paying dividends. Probably but we don't know. Is it possible that it could become paid up earlier? meaning you no longer pay premiums? Good chance but no one can tell without seeing the policy. You can tax free loans I guess but as to how much and to do it correctly you need a agent who can read whole life. Most of these agents here can do it. Term and invest the difference? Yeh but most people don't invest the extra money. Plus we're not really talking about that large a policy that that cash you free up is a big difference. If you saw the price difference on larger policies between Whole Life and Term you would see what "invest the difference" can really mean. There's WAY more money involved. Maybe State Farm has an insurance specialist you can talk to? The agent who sold the policy is clueless.

Maybe there is a SF life insurance specialist closer than you think?
 
People always go sideways with these older WL policies.

First, forget what you have now. THen, determine how much insurance you need. Next, determine what type of insurance you need.

Now, compare what's on the market with what you have. And that should give you your decision.

For example, it doesn't seem like you really need life insurance right now. If that's correct, then cancel and take the cash value.

If you don't need insurance but want to guarantee your future insurability (which is more than most consumers would do) then you have three choices. 1) cancel and buy term, 2) take the paid up values 3) continue to pay the premiums.

If you do need insurance, then do you need term or permanent? If you need term, then again, cancel and buy term. If you need permanent, compare $50K of what's available on the market today with what you have with state farm. It'll either be cheaper or more expensive.

That's the decision tree I normally take people through. It saves all the hysterics about all the history of the existing insurance and the speculation going forward.

However, in the end the premiiums on these policies are low enough that I suggest it's not a financial decision it's a discretionary decision. $55/month, you probably spend more than that on cable TV. If it's a big deal, follow the above. If it's not a big deal, keep it. As most here have already noted, people who have inforce permanent policies when they're older are generally pretty happy, and those that had them when they're young and cancelled regret the decision later - nothing to do with finances. I stick to finances and the numbers myself, but just be aware of that reverse buyer's remorse effect. (and again, like others here, I wish I'd have bought a monster WL policy when I was 27. )
 
DI can cover nearly every one of those unfortunate circumstances.

Sure, speculation on estate taxes but it is such a nominal amount in 50 years, what effect would it even have?

I didn't mean to come off as flip, but at his age, if the choice is between this policy and term, the term likely provides much more value to him and his future family.

He could always have both...

That is normally the best solution..Permanent for permanent needs and term for temporary needs. I didn't take it as your trying to be flip, just an honest difference of opinion about the products and the need for them. The same with STI.. I didn't mean to come off as insulting to him. Will have to say my opinion is jaded by my personal experience at age 70 and is different from what my opinion was when I was 40.
 
As mentioned, get an inforce illustration. The policy has paid up additions which means its growing in DB as well as cash value. You are looking at the guaranteed only page, get the inforce so you know what is going on.

My guess is your policy cash value will grow by as much or more than your premium within a few more years. Then its a moot point... you pay $300 and it grows by $300+ on the cash, plus your DB goes up.

We have an old WL policy that is on my wife since she was 6 - 39yrs. The DB is almost 3x what it was originally, and the cash value is grows by 3.5x the premium each year...just by paying the premium. They are very efficient over the long term. You just need to know where you actually are - then you can make an educated decision.
 
As mentioned, get an inforce illustration. The policy has paid up additions which means its growing in DB as well as cash value.


Where does it state that this policy has PUA dividend option?

If that is the illustration of cash values found within the policy, it will not show any dividends as the policy illustration is only allowed to show guarantees... It would be interesting to see the illustration that was used as the proposal.
 
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