by davidg » Wed Dec 19, 2007 05:15 am
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.
Posted: Thu Dec 20, 2007 12:42 am Post Subject:
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.
Posted: Thu Dec 20, 2007 09:05 am Post Subject:
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.
Posted: Thu Dec 20, 2007 09:34 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 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.:)
To know more about universal life insurance policy click the following url,
http://www.ampminsure.org/universal-life.html
Posted: Thu Dec 20, 2007 09:39 am Post Subject:
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.
Rupert
Posted: Thu Dec 20, 2007 10:06 am Post Subject: Thank you Sil !
Hi Sil
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
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.
Posted: Thu Dec 20, 2007 05:43 pm Post Subject:
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
Posted: Fri Dec 21, 2007 08:04 am Post Subject: Welcome
Hey! Dreamer
I am really enjoying participating in here with all the community members as a group.
I have read the posts of the senior members and those are really awesome...Informative indeed.!..
We can all participate in this swing and try to develop this community....Dreamer :) ...
So best of luck to all of us .... :D
Posted: Sat Dec 22, 2007 11:38 am Post Subject:
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.
Posted: Sat Dec 22, 2007 12:06 pm Post Subject:
Sil
thanks for the nice reply, I appreciate it, I really like this community and it is good to see you here, look forward to reading more from you.
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