Let it lapse?

[bongorob]

Recent whole life statement for 250k policy states if payments discontinue policy will terminate w/o value in 6 years; if payments continue policy will terminate in 8 years w/o value.

Does this mean after paying 52k over 25 years my policy is worthless unless I croak?

Should I just discontinue at this time?

 

[tabinek]

@bongorob That’s not a whole life policy. It’s a universal life contract (of some flavor). You can ask the company for a projection of the premium necessary to carry the policy for the rest of your life. You could also ask them for the face amount reduction that would help your current premium make the policy last.

Or you can cut your losses and surrender for the current account value.

 

[caspiansails]

@bongorob Whole life policies have surrender options that give you something back including reduced paid-up policies. If you are paying the premium on time and it says the policy will still terminate you’re probably dealing with a universal life insurance policy instead of whole life. The key distinction is the premium schedule of universal life follows that of term life so it’s cheap at the start but in the later years of the policy the premium becomes astronomical and can even erode the “cash value” inside the policy since most people never see the amount of premium paid out of pocket increase to make up the difference.

 

[jwalk33]

@bongorob It sounds like a Universal Life policy. You can ask the carrier to illustrate what premiums are needed to keep the coverage to a certain age. There are many factors to consider. Including if you are insurable if you want to buy an alternate policy.

 

[cgdtaylor]

@bongorob Depending on your age and details of the policy you could potentially look into a life settlement where you sell your policy to an investor for a dollar amount to be determined by them.

 

[iamnazarene]

@bongorob its never a good idea to let a policy lapse.