We have a term life ins policy on my husband with will expire in 8 years.Can we extend it for a longer term now?
Total Comments: 12
Posted: Wed Jun 02, 2010 04:07 am Post Subject:
"Extending" a term policy is not unheard of, but this is usually under the terms of a "renewability" provision at the end of the original term -- which would mean 8 years from now.
On the other hand, your husband's term policy probably includes a "conversion" privilege -- almost all do. It's possible that it may be convertible to another term policy, but not highly likely. The only company I am aware of that allows this in 100% of its term policies is Primerica Life Insurance Company, and you may have to have held the policy for three to five years before it can be converted.
All other life insurance companies that I'm aware of normally only allow a conversion to some form of cash value policy such as whole life or universal life. You'll have to read the policy for the exact language regarding terms and conditions of conversion/renewability. Look for the heading "Conversion" or "Conversion Privilege" or "Renewability" in the table of contents, index, or body of the policy. It should be there somewhere (renewability and conversion provisions are usually found close to one another; if they're not anywhere to be found, then the policy isn't convertible or renewable).
If your policy is one that can only be converted to a form of cash value policy, it will be to one of the company's choice of product(s). If available, you could consider a universal life policy and pay extra for the "no-lapse guarantee" which could be offered. To make that work over the lifetime of the insured (your husband) it requires that no premium payments are ever missed. Such a policy can be written with minimum premium payments somewhat higher than, but fairly close to, an equivalent term policy.
Under those conditions, it will never develop significant cash value and will eventually have no cash value at all. The one time a premium payment is missed the no-lapse guarantee will disappear and in order to keep the policy in force after that, it will take more and more money in premium payments, increasing every year with age, exactly the same as any other "annually renewable" term policy.
For that reason, I'm not a big fan of these policies, but if you can find a way to never miss a premium payment, it will work as stated in the contract. But that's a big "IF".
However, if your husband is currently insurable, it might be appropriate to apply for a new 20- or 30-year term policy according to your needs. But it will be more expensive than the existing policy simply because of your husband's "advanced" age (not to suggest that he's "old") and the longer policy duration. Depending on your husband's age at the end of that term, the policy might or might not be renewable for another term of the same length, but would probably be "annually renewable" (increasing premium each year) after that to age 70-75-80 or even later. And, unfortunately, such a policy, if necessary to keep it in force at such a late age, will become extremely expensive, to the point that a few year's worth of premium payments will easily equal, then exceed, the actual death benefit.
This is what could make a cash value policy, which will be "permanent" to at least age 120 or 121, a more cost-effective, long term solution.
He could apply for a new universal life policy as described above. Or a "plain vanilla" whole life policy -- for which you'd pay a higher, but level premium. The policy would develop cash value, and after the first two or three years, you would have access to a portion of the cash value in the form of policy loans or partial withdrawals (either of which alters the death benefit).
Your options at this point are limited only by your husband's insurability status and ability to pay premiums. If healthy, the options are many; if not, he may have few options or none at all.
A good agent (there are plenty of us here) will meet with you and your husband and have the ability to evaluate your situation, your objectives, and your various insurance needs (life insurance is only one part) and recommend the appropriate product(s) to meet those needs. In the absence of such an in-depth analysis, anything else is mere speculation.
Posted: Sun Jun 06, 2010 12:45 am Post Subject:
Dont waste your money on whole life policy go term!
Posted: Sun Jun 06, 2010 07:43 am Post Subject:
Dont waste your money on whole life policy go term!
Well, there's some information that is really useless.
Even those of us who believe term life insurance is beneficial in many situations have to recognize that term is NOT APPROPRIATE in all situations.
I would NEVER advise someone to use term life to cover an estate-planning need, for example.
Unfortunately, even the Primerica "crusade" to cover the world with term insurance often blinds its own representatives to the fact that no single insurance product, including term, is the perfect answer to all needs.
Posted: Sun Jun 06, 2010 12:08 pm Post Subject:
People who have no understanding of life insurance prefer whole life when it is explained to them.
People who have some knowledge of life insurance, but not enough believe that everyone should just buy term insurance.
People who have lots of life insurance knowledge understand that all situations are different. Term insurance is great product. Whole life insurance is a great product. The situation will dictate what is appropriate and in many situations it isn't an "either/or" and both products are used.
Insurancebydave, get some more knowledge!
Posted: Mon Jun 07, 2010 12:04 am Post Subject:
Term insurance is great product. Whole life insurance is a great product. The situation will dictate what is appropriate and in many situations it isn't an "either/or" and both products are used.
Now there's a reasonable reply.
There's nothing wrong with the concept of buy term and invest the difference. And there's nothing wrong with the "forced savings" approach behind whole life. Either will work provided there is the self discipline to see either plan through to completion. Each approach has its own set of pros and cons, just like term and WL have both.
So it's not so much a matter of "which is better" as much as it is "which is most appropriate" for any given situation. What may be appropriate today can easily be inappropriate five or ten years down the road. Same as a $100,000 policy may be sufficient for a 25 year old newly married person, but several years from now, as a mortgaged homeowner, with a couple of kids and the "obligatory" credit card and other debt, $750,000 may be the correct answer.
That's the important thing for both the client and the agent to understand, that life insurance is a dynamic, fluid concept, not a one-size, buy-it-and-forget-about-it product. It will have to be revisited from time to time to make sure that what's in place, who the beneficiary(ies) may be, all of that and more, is proper at the time.
Posted: Mon Jun 14, 2010 02:44 am Post Subject:
Whole life is a waste of money. Google "Suze Orman term life vs whole life insurance".
Posted: Mon Jun 14, 2010 04:16 am Post Subject:
Whole life is a waste of money. Google "Suze Orman term life vs whole life insurance".
It's unfortunate that you continue to show your ignorance of the use of cash value insurance when appropriate.
I and many others here are certainly fans of recommending term insurance when appropriate. But we also recognize that term is very inappropriate in certain situations, particularly those relating to estate planning issues.
In most circumstances, it would be highly inappropriate to recommend term insurance to an older couple (age 50+) considering a survivorship policy and who expected to live into their 80s or beyond. A UL policy could be less expensive than a whole life policy, but the general concept is that a cash value policy would be the best recommendation in such a situation.
Suze Orman, Charles Givens, Dave Ramsey and many others all recommend term insurance in "most" situations. But their words have to be understood in terms of what they are recommending: getting the most protection for the least amount of money. Term will do that. The other half of their premise is to save the difference between the term premium and the cash value premium in mutual funds or other vehicles, and there's generally nothing wrong with that in theory either.
But when the issue is entirely different -- having money to pay taxes and other estate-liable expenses following death so that estate assets do not have to be liquidated for that purpose will not be cost-effective when done with term life when the insured lives to ripe old age. In such a scenario, the need for cash savings is not normally a consideration.
So, in a few years, when you have more experience and understanding of the uses of life insurance -- perhaps as a result of doing some of your continuing education -- you'll have a better appreciation of the value/use of cash value insurance in the right situation.
Posted: Mon Jun 14, 2010 01:15 pm Post Subject:
insurancebydave,
Here's a challenge for you. Find someone with an expertise in insurance who makes the blanket statement that whole life is a waste of money.
Posted: Sat Sep 25, 2010 07:30 pm Post Subject: I have expertise in insurance...
....and I say that whole life is a waste of money. There, I said it. If you are looking for protection of your estate, go with a simple savings program. I would say a cash value life insurance program would be the better option maybe .001% of the time. Certainly its never the best bet for anyone making under $200k a year, which is pretty much everyone!
Posted: Sat Sep 25, 2010 11:24 pm Post Subject:
John1134, you can say anything that you want, but your words are useless without knowledge to back them up.
Posted: Wed Jun 02, 2010 04:07 am Post Subject:
"Extending" a term policy is not unheard of, but this is usually under the terms of a "renewability" provision at the end of the original term -- which would mean 8 years from now.
On the other hand, your husband's term policy probably includes a "conversion" privilege -- almost all do. It's possible that it may be convertible to another term policy, but not highly likely. The only company I am aware of that allows this in 100% of its term policies is Primerica Life Insurance Company, and you may have to have held the policy for three to five years before it can be converted.
All other life insurance companies that I'm aware of normally only allow a conversion to some form of cash value policy such as whole life or universal life. You'll have to read the policy for the exact language regarding terms and conditions of conversion/renewability. Look for the heading "Conversion" or "Conversion Privilege" or "Renewability" in the table of contents, index, or body of the policy. It should be there somewhere (renewability and conversion provisions are usually found close to one another; if they're not anywhere to be found, then the policy isn't convertible or renewable).
If your policy is one that can only be converted to a form of cash value policy, it will be to one of the company's choice of product(s). If available, you could consider a universal life policy and pay extra for the "no-lapse guarantee" which could be offered. To make that work over the lifetime of the insured (your husband) it requires that no premium payments are ever missed. Such a policy can be written with minimum premium payments somewhat higher than, but fairly close to, an equivalent term policy.
Under those conditions, it will never develop significant cash value and will eventually have no cash value at all. The one time a premium payment is missed the no-lapse guarantee will disappear and in order to keep the policy in force after that, it will take more and more money in premium payments, increasing every year with age, exactly the same as any other "annually renewable" term policy.
For that reason, I'm not a big fan of these policies, but if you can find a way to never miss a premium payment, it will work as stated in the contract. But that's a big "IF".
However, if your husband is currently insurable, it might be appropriate to apply for a new 20- or 30-year term policy according to your needs. But it will be more expensive than the existing policy simply because of your husband's "advanced" age (not to suggest that he's "old") and the longer policy duration. Depending on your husband's age at the end of that term, the policy might or might not be renewable for another term of the same length, but would probably be "annually renewable" (increasing premium each year) after that to age 70-75-80 or even later. And, unfortunately, such a policy, if necessary to keep it in force at such a late age, will become extremely expensive, to the point that a few year's worth of premium payments will easily equal, then exceed, the actual death benefit.
This is what could make a cash value policy, which will be "permanent" to at least age 120 or 121, a more cost-effective, long term solution.
He could apply for a new universal life policy as described above. Or a "plain vanilla" whole life policy -- for which you'd pay a higher, but level premium. The policy would develop cash value, and after the first two or three years, you would have access to a portion of the cash value in the form of policy loans or partial withdrawals (either of which alters the death benefit).
Your options at this point are limited only by your husband's insurability status and ability to pay premiums. If healthy, the options are many; if not, he may have few options or none at all.
A good agent (there are plenty of us here) will meet with you and your husband and have the ability to evaluate your situation, your objectives, and your various insurance needs (life insurance is only one part) and recommend the appropriate product(s) to meet those needs. In the absence of such an in-depth analysis, anything else is mere speculation.
Posted: Sun Jun 06, 2010 12:45 am Post Subject:
Dont waste your money on whole life policy go term!
Posted: Sun Jun 06, 2010 07:43 am Post Subject:
Dont waste your money on whole life policy go term!
Well, there's some information that is really useless.
Even those of us who believe term life insurance is beneficial in many situations have to recognize that term is NOT APPROPRIATE in all situations.
I would NEVER advise someone to use term life to cover an estate-planning need, for example.
Unfortunately, even the Primerica "crusade" to cover the world with term insurance often blinds its own representatives to the fact that no single insurance product, including term, is the perfect answer to all needs.
Posted: Sun Jun 06, 2010 12:08 pm Post Subject:
People who have no understanding of life insurance prefer whole life when it is explained to them.
People who have some knowledge of life insurance, but not enough believe that everyone should just buy term insurance.
People who have lots of life insurance knowledge understand that all situations are different. Term insurance is great product. Whole life insurance is a great product. The situation will dictate what is appropriate and in many situations it isn't an "either/or" and both products are used.
Insurancebydave, get some more knowledge!
Posted: Mon Jun 07, 2010 12:04 am Post Subject:
Term insurance is great product. Whole life insurance is a great product. The situation will dictate what is appropriate and in many situations it isn't an "either/or" and both products are used.
Now there's a reasonable reply.
There's nothing wrong with the concept of buy term and invest the difference. And there's nothing wrong with the "forced savings" approach behind whole life. Either will work provided there is the self discipline to see either plan through to completion. Each approach has its own set of pros and cons, just like term and WL have both.
So it's not so much a matter of "which is better" as much as it is "which is most appropriate" for any given situation. What may be appropriate today can easily be inappropriate five or ten years down the road. Same as a $100,000 policy may be sufficient for a 25 year old newly married person, but several years from now, as a mortgaged homeowner, with a couple of kids and the "obligatory" credit card and other debt, $750,000 may be the correct answer.
That's the important thing for both the client and the agent to understand, that life insurance is a dynamic, fluid concept, not a one-size, buy-it-and-forget-about-it product. It will have to be revisited from time to time to make sure that what's in place, who the beneficiary(ies) may be, all of that and more, is proper at the time.
Posted: Mon Jun 14, 2010 02:44 am Post Subject:
Whole life is a waste of money. Google "Suze Orman term life vs whole life insurance".
Posted: Mon Jun 14, 2010 04:16 am Post Subject:
Whole life is a waste of money. Google "Suze Orman term life vs whole life insurance".
It's unfortunate that you continue to show your ignorance of the use of cash value insurance when appropriate.
I and many others here are certainly fans of recommending term insurance when appropriate. But we also recognize that term is very inappropriate in certain situations, particularly those relating to estate planning issues.
In most circumstances, it would be highly inappropriate to recommend term insurance to an older couple (age 50+) considering a survivorship policy and who expected to live into their 80s or beyond. A UL policy could be less expensive than a whole life policy, but the general concept is that a cash value policy would be the best recommendation in such a situation.
Suze Orman, Charles Givens, Dave Ramsey and many others all recommend term insurance in "most" situations. But their words have to be understood in terms of what they are recommending: getting the most protection for the least amount of money. Term will do that. The other half of their premise is to save the difference between the term premium and the cash value premium in mutual funds or other vehicles, and there's generally nothing wrong with that in theory either.
But when the issue is entirely different -- having money to pay taxes and other estate-liable expenses following death so that estate assets do not have to be liquidated for that purpose will not be cost-effective when done with term life when the insured lives to ripe old age. In such a scenario, the need for cash savings is not normally a consideration.
So, in a few years, when you have more experience and understanding of the uses of life insurance -- perhaps as a result of doing some of your continuing education -- you'll have a better appreciation of the value/use of cash value insurance in the right situation.
Posted: Mon Jun 14, 2010 01:15 pm Post Subject:
insurancebydave,
Here's a challenge for you. Find someone with an expertise in insurance who makes the blanket statement that whole life is a waste of money.
Posted: Sat Sep 25, 2010 07:30 pm Post Subject: I have expertise in insurance...
....and I say that whole life is a waste of money. There, I said it. If you are looking for protection of your estate, go with a simple savings program. I would say a cash value life insurance program would be the better option maybe .001% of the time. Certainly its never the best bet for anyone making under $200k a year, which is pretty much everyone!
Posted: Sat Sep 25, 2010 11:24 pm Post Subject:
John1134, you can say anything that you want, but your words are useless without knowledge to back them up.
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