OT universal life insurance at 72 years old

[mbrtool]

I apologize ahead of time for bending anyone's ear. I'm almost 72...just sold my business...10.5 months serving as a consultant to the new owner then I'm done. I've done a few financial forecasts on our retirement and we're set for the next 25 years. If I cash out this month I'll have about $150 in cash value...which is fine with me. I bought this policy as a hedge against my business loans six years ago.
I believe I should just cash out and save the annual $4500 premium.

Thanks,

Ray

[Ken Robb]

We don't know the death benefit so we can't judge risk/reward but If you died tomorrow would any dependents be strapped financially? Would you and your heirs be better off if you bought insurance to provide disability/ long-term care if you needed that?

[AngryScientist]

$4500 annual premium?

what's the death benefit?

if i'm in your sidis i'd put 15 grand in a separate account payable to your trusted beneficiary upon death and call it good. that'll cover final expenses as long as the rest of your affairs are in order, which it sounds like they are.

$4500/year is a lot of cash to put out there.

plus, you're a cyclist. you're healthy. you've got a lot of life to live, that's a freaking nice titanium frame you're throwing out every year!

[Irishgirl]

There are not enough details to provide guidance.

The simple math is do a Financial Needs Analysis. Simply speaking you want to add up all your outstanding debt plus a calculation of an annual income to provide benefits to any dependents taking into account their life expectancy then subtract any income, investments and assets this will generally show you if you need any life insurance. Keep in mind this does not take into account any interest accumulation projection.

You may want to seek the guidance of a CFP.


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[dgauthier]

I have a hard time seeing any need for life insurance once one is not earning any income.

[Llewellyn]

By and large I think life insurance is wasted money unless your death would leave your family financially up s**t creek if you unexpectedly popped your clogs. I think $4,500 a year could be put to better use, especially at the OP's age.

[mbrtool]

The death benefit is $250K...my wife and I have no debt...my kids are doing well.

Ray

[peanutgallery]

Unless your goal in life is to make someone else rich, ditch the policy. I've always been suspicious of Universal Life policies

Congratulations BTW

[VTCaraco]

Analytically, weigh the $4500 per year against the notion of leaving $250k behind.

I would imagine that the insurer would love for you to walk away. Giving you back $150 versus the $250k if you pass is a no-brainer option for them.

But you're older and surely wiser than I am...


Ultimately, the process need not be purely logical here....and is a very personal decision.

My real point is to consider what you want to leave behind...which may well be more than what will be needed to cover the end-of-life expenses.

*I'm NOT a CFP or connected in any way to the industry, but this is how I think about life insurance*

[godfrey1112000]

Your bigger risk might be long term care

[oldpotatoe]

Originally Posted by dgauthier

I have a hard time seeing any need for life insurance once one is not earning any income.

Agree..if no 'relatives' need the OPs $, all you really need is the $ to 'make the final trip', whatever or where ever that is.

What we have

https://www.neptunesociety.com/new-h...ww.bing.com%2F

[roguedog]

nothing to add but love this post! thanks for morning chuckle

Originally Posted by AngryScientist

$4500 annual premium?

if i'm in your sidis i'd put.....

plus, you're a cyclist. you're healthy. you've got a lot of life to live, that's a freaking nice titanium frame you're throwing out every year!

[Spaghetti Legs]

At this point, if the family is tucked in, no debt to pay off, all you’re doing is betting the insurance company $4500 you’re going to die within the next year. How do you feel about that bet?

It sounds to me like the policy has served its purpose. I wouldn’t worry about the premium already spent. It might be worth it to see if the policy can be converted to long term care policy, and if so, a more detailed financial analysis needs to be done.

[Ralph]

Not familiar with latest design of these policies...but.....can't you just stop the payments, and keep the policy in force? Use a policy loan to make the premium? if you close out the policy, and take the cash value, won't that be 100% taxable income over and above what you paid in? Maybe I don't understand what you have.

I know I have a large cash value (money invested in Blackrock Cap Appreciation Fund) life insurance product where I wanted to stop payments, but didn't want to close out....for tax reasons, so I just borrow from the policy to make the premium payment. Cash value still grows because the return on investment is greater than the premium.

[Irishgirl]

Originally Posted by Ralph

Not familiar with latest design of these policies...but.....can't you just stop the payments, and keep the policy in force? Use a policy loan to make the premium? if you close out the policy, and take the cash value, won't that be 100% taxable income over and above what you paid in? Maybe I don't understand what you have.

I’m in the same boat and not as familiar with the new policy designs...and it depends if the policy is a TQ Tax Qualified plan when it comes to tax liability.

Life insurance has its purpose and is something over time that should be reviewed/modified...it’s also not a “one size fits all”.




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