Hello, I asked this question a month ago on this website and I am still waiting for advice. My husband and I are retired and have no debt. We purchased three whole life policies 28 years ago and we were promised at the time that the premiums would pay for themselves within 15 years or so. Well five years ago we were still paying the high yearly premiums so we changed the policy to having our dividends pay for yearly premium. Well the premium was low for past few years but it is now slowly creeping up to being expensive again. Should we consider other options or just keep paying the premiums on the life insurance policies? Thank you in advance!!

Terry Says:

Sorry for not getting to your question sooner.  I’ve been swamped!  But I have written about this situation several times in recent columns.  Here is a link to a column on this life insurance issue posted in September.

You likely purchased universal life insurance, with premiums “illustrated” to stay low because investment earnings were illustrated to generate gains that would pay the premiums. That didn’t happen.  So now you are faced in your senior years with rising premiums to keep the policies “in force.”

First, ask yourself whether you still NEED the life insurance.  If your mortgage is paid off, and if your children are wll off, you might not need all this death benefit.  Remember, insurance is designed to protect the living, not the dead!

Here’s how to get an unbiased estimate of how much you will  have to pay in the future to keep these policies going:

At EvaluateLifeInsurance.org, the Consumer Federation of America and Dr. James Hunt, insurance ombudsman, will provide personalized evaluation and advice for a fee of $125 for the first policy, and $85 for each additional policy. They also compare existing policies with policies being considered as a replacement.

Arthur J. Gallagher, one of the largest insurance brokerage firms in the world, routinely does this analysis for corporate customers and wealthy individuals. They offer a free policy analysis service at https://gbslife.wixsite.com/gbs-life-insurance. AJG represents almost all major insurers, so are not conflicted in their advice.

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