Term Life Insurance
Hi Terry – my husband and I purchased a 20 year term policy for $150,000 in 1995. For the last 9 years the premium has steadily increased yearly. We are retiring this year and can no longer afford the new monthly payment of $750. My husband is now 70 years old with health issues so we do not qualify for a new policy. Should we cancel the policy and save or invest the monthly payment?
Terry Says
Well, you made the mistake of not purchasing a LEVEL term policy –=one on which the premiums do not rise! In fact, I’m not quite sure about what kind of policy you have — and whether it might have some cash value built in. And whose life the policy insures — his or yours? That’s a very steep premium to insure one life –even at your age.
And there’s the question of who is the beneficiary of this policy — and whether the proceeds are still needed at this stage of life, since your mortgage is probably paid off.
Bottom line: without knowing more details, it’s difficult to answer the question. Feel free to write back to the email you receive saying your question has been answered.
In general, I suggest you contact the company and ask if there is any residual cash value if you cancel. This is such a bad policy, from what you describe, that I wouldn’t let them talk you into switching into another policy they offer. And if you don’t need the coverage, this would be the time to drop it.
