Posted: Wed Dec 19, 2007 5:15 am Post subject: What type of insurance should I get and is this change OK.
I have a 100K term life policy with Allstate and have had it for 20 years. It is about to end in a few years and my agent has suggested I convert it to a universal at lower premium than I am paying now and supplement with 150K of term. The total cost is only about $50 more than I am spending a month now. Should I do this or just buy another term which I could probably get for around the same price I am paying now only for 200K. I am 55.
Welcome davidg, I don't know much about life insurance, I am sure that someone will come along soon and be able to answer your question. Hang in there.
Hi ……, I can understand your anxiety. Wrong decisions regarding life policy can affect your future plans more adversely than any other financial decision. With other financial tools you may get the opportunity to rectify your decision in future but with the life insurance, it'll put the future of your family at jeopardy.
Therefore, consider all the options available to you and then decide accordingly. Just don't blindly commit on anything as because the agent has told you. _________________ Register Now to have your Insurance queries solved.
Posted: Thu Dec 20, 2007 9:34 am Post subject: Suggestion for a better option
hi davidg!
To convert your term life insurance to a universal at lower premium than what you are paying now is indeed a good suggestion.However you would be the best person to decide on this. Consider your situation and the option they are providing and only then come to a conclusion.
I can only guide you through some general information...
The term life insurance is a type of insurance policy that give you protection for a stipulated period of time.
The premium amount in the term life insurance is low compared to any other policy because it does not give you any cash value benefit.
You only pay the premium amount and the company offers the death value benefit (reimbursement to your nominee and so on) in turn.
Till now you have been paying the premium amount for your term life. Opting for a universal life insurance now would also not cost you much, as you are advised to supplement your term insurance with the universal insurance.
The universal life insurance normally gives you death value as well as the cash value benefit.
The universal life insurance is so flexible that you may adjust the death benefit according to your requirement.
Based on your financial status you may choose to pay smaller or larger premiums according to your financial status.This a very good advantage for those who have a fluctuation in their income level.
The flexibility that the Universal life insurance offers is mainly dependent on the tax-deferred basis. An amount of the premium is invested by the insurance company in bonds, money market funds or mortgages. And the return that is received from the investments is then credited to your policy tax deferred.
However, the insurance company promises a minimum interest devoid of the interest they receive from the investment.If the insurance company gets good return from the cash value your return would also increase.So the universal insurance devoid of the risk factor seems to be a better option in general.
My friend, you need to understand the fact that your requirements for a life policy have changed since the time you had taken out the policy in discussion. Term life policies are normally good when you are young and need an extra layer of protection for your family.
With the universal life plan you may enjoy the coverage for the entire lifetime. And unlike the term policy, it'll also create a saving for you, known as the cash value, as a portion of the premium paid will be invested in the market. This accumulated fund can be used by the policy holder at the time of need. Moreover, the policy holder is also awarded with the freedom to pick the investment vehicle of his/her satisfaction.
However, the investment may not earn a fixed return all-through as it will depend upon the performance of the market. But again, I'll second Dazzlingdiamond, that your decision should justify your needs. Please let us know if we can be of any further assistance.
Posted: Thu Dec 20, 2007 10:06 am Post subject: Thank you Sil !
Hi Sil
Quote:
So the universal insurance devoid of the risk factor seems to be a better option in general.
Would you kindly tell me if it is possible for me to have all the policy benefits retained once I shift from a term life policy ? (Assume that I am prepared to pay for the extra premium amount)
Thanks,
WizardOfOz _________________ Register Now to have your Insurance queries solved.
Posted: Thu Dec 20, 2007 11:38 am Post subject: universal life insurance policy
Well WizardOfOz,
Situation differs from case to case.And the benefits that the insurance company offers generally depends on the clauses of the policy.I do not know what facilities you are enjoying now.So it would be more relevant if you inquire about this from your insurance agent.And certainly get everything cleared up as much as possible before you take the final step.
sil, what a great response, so informative, I knew some one would come along, like you, (smile, smile) and help davidg out, It is hard for some of us who don't have such a great working relationship with insurance to be of any guidance, however we can always learn from really good posters like yourself. Good work
Hi sil and welcome to the community, I have not been here for a little while, I come back and there are some pretty awesome new people here. I agree with dreamer, excellent post with some real good information in it.
You pretty much covered it all for me, again great post.
With such warm welcome from Dreamer and Goodnatured i am truly feeling great.Thanks a lot.I am honored to be a part of this community....THANKS A LOT.....
Hello davidg, welcome to the place where a bunch of us hang out when we're bored.
I'm in central CA and although there isn't any snow where I'm at, Lake Tahoe is just up the road a bit and there is plenty there.
Ok, now we'll get down to business.
Let me begin by saying that, professionally speaking, I do not like Allstate. I have represented parties who have sued them a few times for life insurance fraud-related issues and I am just not a fan.
I understand that you are now 55 years old. If you plan on living to (or beyond) your life expectancy (statistically speaking) and would like to leave someone a few bucks when your heart stops beating, term insurance is very likely a poor choice. You may be able to secure a 20 or maybe even a 30-year level term plan but realize that when those are done, a new policy will prohibitively expensive.
When you said that an Allstate agent wants to convert your term plan to a new UL policy (assuming the face value will remain the same) and your premium will be less than you are currently paying sent bright red skyrockets streaming towards the heavens.
Before I can call this agent an imbecile, I'll need just a bit more information on his proposal. If you'd like me to help, I'd be happy to do so. I'd rather steer you clear of trouble today than have to investigate your agent for fraud tomorrow.
Mark _________________ Please feel free to go to my website at www.markcolbert.com or, if you have a specific question, you can email me directly. I hope I can answer any questions you might have. If not, I can certainly find an answer right away.
The term life insurance is a type of insurance policy that give you protection for a stipulated period of time.
