by Guest » Tue Aug 20, 2013 07:23 am
I am 15 years into a 30-year term life insurance policy and am thinking about stopping payments on it. Child is 16, spouse is retired, and I earn a little money (maybe $15,000 per year) just for entertainment. Due to an inheritance we have enough assets that we are set; my husband and son just wouldn't need the life insurance if I were to die tomorrow.
I asked our insurance agent whether there was any reason to keep a life insurance policy when income replacement wasn't needed and the only reason he could think of was to pay estate taxes. Right now our assets are small enough that estate tax won't be owed so that isn't an issue unless they change the estate tax law.
Any reason to keep the policy?
I asked our insurance agent whether there was any reason to keep a life insurance policy when income replacement wasn't needed and the only reason he could think of was to pay estate taxes. Right now our assets are small enough that estate tax won't be owed so that isn't an issue unless they change the estate tax law.
Any reason to keep the policy?
Posted: Thu Aug 22, 2013 05:15 am Post Subject:
Any reason to keep the policy?
Why are you asking us? Apparently you have already decided the question. For most people, especially those under age 65, giving up a life insurance policy that's affordable is not always a wise decision -- term, whole life, universal, it really doesn't matter. If you later decide it was not a good choice, but you cannot qualify to reinstate it, a new policy would be hugely expensive in comparison to what you once had.If you are 16 years into a 30 year term policy, I'm guessing your premiums are rather small.
If you have the money available, you could buy a single premium deferred annuity and use it to pay the insurance premiums each year for the next 13-14 years and keep the policy to the end of term. If you haven't died, then you can cash out the balance of the annuity, perhaps pay a small amount of income tax, and go on your merry way.
If you die in the meantime, your beneficiary will get the death proceeds, whether they need them or not, and the balance in the annuity. So what's the downside? Someone left you an inheritance, you don't want to leave one to your son?
Taking money from the annuity would cause a small tax liability each year (only the interest taken out to pay premiums would be taxable, and using an IRC 77(t) distribution plan would avoid the 10% penalty tax if you are under age 59-1/2), and any remaining interest would be taxable to your beneficiary, but that would be very small or nonexistent.
unless they change the estate tax law
AHA!That's the million dollar question. Anything is possible when they determine it's the only way left to pay for Obamacare.
Posted: Thu Aug 22, 2013 03:47 pm Post Subject:
There are many reasons for dropping life insurance policy and the reason that you mentioned is quite understood and one can easily do this.
Posted: Thu Aug 22, 2013 10:49 pm Post Subject: Thinking of dropping life insurance policy
Hi,
I am a businessman and my company is Amrita financial. May i help you with a better solution. Find the contact number on my web site. I want to help you and it's really pleasure for my company of doing something for you.
Posted: Fri Aug 23, 2013 12:05 am Post Subject:
PaulBowen . . .
Perhaps you did not read the OPs post correctly. She has a a term life policy. I've never known a Life Settlement company to take on a term policy. Additionally, there is nothing to indicate that the OP is ill, and has a nice long life expectancy ahead of her. What makes you think she and her policy are a good candidate for a life settlement? With no cash value, how will you make a life settlement compliant with the insurance code?
Waste of time if you ask me. Besides, according to the Utah Dept of Insurance, "your company" Amrita Financial is not even licensed as a Life Settlement Provider/Broker. Their website advertising those services is in violation of Utah state law. At least you and your "Ashar Group, LLC" out of Florida are.
Posted: Thu Aug 29, 2013 05:57 pm Post Subject:
There are many reasons for dropping life insurance policy and the reason that you mentioned is quite understood and one can easily do this.
[Link deleted per TOU]
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