[USER]

Anyone have any advise about life insurance policies? I bought both a convertible term (10 year which premium is $10 a month for $500,000 policy) and whole life (premium is $160 a month and death benefit is currently at $107,000 and cash value is $11,000) back in 2017.

I am no expert in life insurance, so wanted to get your thoughts…

I am a 39 year old married with a 3 and 6 year old.

[Elaine]

Ask your agent if it allows you to leverage your policy?

[Valerie]

I would guess you don’t have enough, though you didn’t share enough info.

[Michael]

Do you need life insurance? Generally speaking, your need for life insurance directly corresponds to how badly someone needs your income and that tends to decline over time as you build wealth in other assets.

For the majority of people, starting with a high total across several varying policy terms and let them expire as your need for insurance gradually goes away, eventually self insuring.

[Mark]

That’s a good rate for term. Hard to answer without knowing financial situation.

For term, a 20 year may make sense due to having a young family. The thinking behind it is by 20 years (hopefully) you’ve build a nest egg to not need insurance in case you die unexpectedly

As for the whole life that seems like a very high premium for only $11k cash value.

Not sure how they structured it but by year 7 if structured correctly you should have more cash value than the premiums you’ve paid. But doesn’t sound like it was made this way.

They typically aren’t which is why whole life gets a bad rap.

You have options. You can go reduce paid up. If you want to keep the whole life insurance but stop paying premiums. This would reduce your death benefit though.

You can then borrow against the cash value. So, you won’t pay taxes be cause it’s a loan. You’ll need to pay interest on the loan on your terms. But if you don’t it will just reduce the death benefit to your beneficiary

Hopefully I don’t get all these crazy comments about whole life like I did the other day.

It’s like walking into a lions den when you mention the W word around here

[Frank]

You should be looking for 20 year level term assuming you won’t need it anymore when your children are adults. At more than one company.

You have not articulated any need for whole life insurance.

[Author]

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