NLIC.org

Loretta Said:

if i have a whole life insurance policy with premiums that go up every year,can i sell it to someone else ?

We Answered:

Whoever owns the policy, has to make the payments, and gets to pick who gets the money when you die.

You might be able to transfer ownership of the policy, you'll have to call the company and ask.

But you're not going to make "big bucks" doing this - the return on investment, assuming you're not 90 with one foot in the door, is pretty crappy. No one is going to wait 20 years, paying your increasing premiums every year, until you kick off. The numbers just don't work. Your whole life policy is probably worth, well, whatever the cash value is.

Carole Said:

Does a 1 year old child needs life insurance?

We Answered:

If I remember right, you are the same guy who asked about the Guardian whole life policy. Go talk to an independent agent as well. I'm not saying Guardian stinks, but if that guy or gal has an obligation to sell Guardian even if they have access to other companies this is an obviously biased position.

Mbrcatz is right about juev policies that are guaranteed issue. I just replaced one that was 25 years old, decreasing whole life (the owner never heard the word "decreasing" when she bought it), and there is only $800 of cash value.

There a number of good, fully underwritten options that will allow you to take out 25k to 100k. There are good options besides just whole life and term. Talk to a local agent who has no obligations other than to serve you. It's not the 70's, why is the agent only talking about term or whole life?

As far as needing the coverage? No, he doesn't need the coverage, but then again, my oldest brother wasn't diagnosed with his seizures and retardation until he was 2. Your kid's cost of mortality is incredibly low right now, so it's a good time to at least think about it.

Ruben Said:

Can whole life insurance premium go up after 20 years and on a fixed income?

We Answered:

Traditionally, no.

Depends on the type of whole life you have purchased.

Universal and adjustable premium life allows for increases in order to keep the policy from lapsing because they did not earn a sufficient return on your money to cover the increasing cost of insurance (consult the cost of insurance index in your origional policy).

Regular whole life insurance usually does not. If you feel really ripped off, you could consult your state's insurance commissioner, most have a consumer hot line. But in your case, the states themselves have to approve the increase, so you may not have a case, unless the policy was poorly illustrated (insurance agent lied to you), then you may be able to file a complaint if you can prove the agent lied to you. You should know though, the law is on your side as the consumer in the insurance world. Because you have no role in drawing up the contract, that is it is unilateral, courts defer to the party that had not role in the wording of the contract, allowing vague verbage to be interpretted in your favor. IF it was universal life though, you just made a bad decision, and you should consult an insurance agent with a good MUTUAL insurance company that pays dividends on regular whole life insurance. Some of the best out there are Mass Mutual, New York Life, Northwestern Mutual, State Farm (they push Universal though).

I apologize for your problem, it is unfortunate that companies are allowed to create contracts like these in our industry, especially when the companies know they wont work out.

Keith Said:

Question on dividends and whole life insurance.

We Answered:

A dividend is a return of your premium. So, it is like you were overcharged and then get some money back. I do not recommend this plan. Dividends are not guaranteed and you have to have the policy a long time before it would ever start paying for itself.

If you want to invest put your money into an IRA or something that is tax deductible or a tax writeoff. See a Stockbroker or financial advisor and not an insurance agent for investing.

Stacey Said:

whole life insurance and taxes?

We Answered:

Are you sure you paying taxes on them? If you are, you are doing something wrong or you are being ripped off from the company you are doing business with.

If you are paying taxes on your life insurance, that mean you probably withdrew money from the cash value and that your policy has lapse. This will be the only case where you will pay taxes on your life insurance. Or if you took a loan out of the cash value and you surrender the policy, you will owe taxes on the loan. Other than that, you do not pay taxes when you pay your premiums.

In IRAs, you will pay a 10% penalty when you make early withdrawals before age 59 1/2. There are exceptions to that rule such as buying your first home or paying for education. If your IRA is a Traditional IRA, you may owe full or partial taxes on withdrawals at anytime. If this is a Roth IRA, any withdrawals after age 59 1/2 are tax free. You do not pay taxes when you invest, but you may pay a sales charge, which is not a tax.