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Richard Said:

what is a free life insurance policy?

We Answered:

This sounds like either a prepaid funeral service type policy (very small policy that is just enough to pay for funeral services), or a limited pay whole life policy (you pay for X number of years and then you keep the policy until you die) but there is no where near enough information to be able to tell for sure.

What you are going to need to do is find the policy itself or at least he policy number and contact the co op insurance that sold it and get them to explain it to you. If this policy was bought roughly 30 years ago there could be hundreds of different variables as to what it might be as product features have changed many many times since then (perhaps an overfunded universal life policy that has enough cash value to keep up the payments?)

Joel Said:

Flexible Premium Adjustable Life Insurance Cash Surrender Question?

We Answered:

A "flexible adjustable life insurance" is really a Universal Life Insurance. They just change the words a bit to make it look enticing.

Anyway, paying $30/month for a total of $85,000 coverage doesn't sound alot, but you can get more coverage for the same amount by buying term insurance. I don't know your age, but if both of you were 30 years old and you both had a 20 year term policy of $100,000 coverage (for a total of $200,000), that would cost you around $30/month.

Base on the information you gave, you and your husband should get a 20 year term insurance, with one of you being the spouse rider. Why? You still have a mortgage and in case something happens to either one of you, wouldn't you want the mortgage to be paid off? You assume that the coverage you have right now is enough, but haven't consider the fact that cost of living goes up every year. If you die, is $35,000 enough for your husband to maintain a same life style? If he dies, is $50,000 enough for you to maintain a same life style? How long will this money last if any one of you die?

If I was in your situation, I would try to apply for a 20 year term insurance. Life insurance is something you need to qualify for. Assuming that both of you are in great health, there should be no problem getting life insurance.

When I get my term policy, then I would cancel the "Flexible Premium Adjustable Life Insurance." I would then invest the $7100 into mutual funds. You may think that its a bad time to invest right now, but its really a good time to invest if your retirement is so far away like 20 years or so. If your investment was to get an average rate of return of 10% during the next 20 years, you could potentially have about $52,000. That's not much, but at least its something.

Katherine Said:

Insurance premium increase for life insurance.?

We Answered:

It sounds like what you have is term insurance, which is very inexpensive while you are young, but as you grow older, gets more expensive. if you just aged passed a rating bracket (ie, you both turned 50), then you would see an increase that reflects the higher mortality rates as you get older. Term insurance can be on a 1, 5, 10 15 or 20 year basis. You'd have to read your policy to see what type you have.

Gail Said:

I have one ICICI prudential life time gold insurance and have paid thrice the premium. Its annual and 21000/-?

We Answered:

Your value will be between 65K to 70K but since market is volitile these days values may change everyday. In right now you cannot surrender your policy as it is not complete 3 year. Wait till Aug 2011 and you can surrender your policy. But there will be surrender charge 1% or 2% when you surrender just after 3 complete year.

Jon Said:

Does skydiving increase insurance premiums?

We Answered:

If you already have the policy, no. However, if you indicated that you don't engage any any hazardous occupation or leisure activity and you later did, the insurance company can refuse to pay, or deduct the higher expense out of your death benefit, as if they would have charged you the higher premium when the policy was in force (e.g. they're backdating and taking money owed for more premium) Read your contract.

If you don't have a policy already and are applying, they can refuse to insure you, or apply an additional rating that might make it unaffordable.

Tyler Said:

Is my universal life insurance policy good the rest of my life?

We Answered:

All universal life policies are self-destruct plans. What do I mean? While premiums remain flexible, the cost of your insurance increases internally every year. So less and less of your premiums goes toward cash value. For example, lets say you pay $100/year into the policy. In the first year, $20 is used to pay for the insurance and $80 goes toward the cash value (hypothetically speaking since its actually lower than $80 because insurance plans have annual fees). Next year, the cost insurance increases to $22 and $78 goes toward the cash value. Eventually, all your $100 is being used to pay for the insurance and $0 goes toward the cash value. Year after that, your premiums will increase to $110. If you just pay the $100, then the $10 will come out of your cash value. Now the cash value is decreasing and when it runs out, your policy will lapse.

If you don't believe me, check the tables in your policy. Actually, you don't have to believe me, the insurance company already told you the truth. Agents don't particularly like telling the truth because if they did, you won't buy it from them. For me, I love telling the truth because it pisses these agents off. All life agents (most of them anyway) think about is commissions and making the sale. Its great you have life insurance, but you could of found a better life insurance product.

I personally sell term insurance (usually 30 year term) and help clients invest their money 100% of the time. Why? Most people don't have lots of money saved right now, so loss of life can be very devastating to the family. So they need the right amount of protection for the lowest possible cost. As they get older, they would have lower financial obligations and their investments will grow, so the need for life insurance declines.

Did you know if you invested $100/month for next 30 years and your retirement account performs at an average rate of 10%, you can potentially have $228,000? If this was in a Roth IRA, all this money can be withdrawn tax-free after age 59 1/2. Its not guaranteed you will get 10%, but its possible since the mutual funds I offer has a long track record of success and have the best ratings from Morningstar. You had the Universal Life policy for almost 25 years, how much cash value has been built?