What Do You Do Now?

{2 minutes to read}  Twenty years ago, I purchased a 20-year term policy. Today, I got a letter from the insurance company about an important milestone that is upon us. The letter then went on to explain that my 20-year term policy has a feature now that allows me to continue the coverage if I want to, at a premium, going up from $1,300 to $52,920. Now, very rarely is anybody going to pay that premium, but this was a term policy, meaning that it normally ends at 20 years. Now that my policy has hit 20 years, this particular term policy gives me the right to continue coverage at this very, very high premium, which I will not pay.

Typically, what people do at this point is either say:  “I don’t need the coverage anymore,” or “I’ll convert this coverage to a new permanent policy,” the premium for which would probably be around $25,000..

So why am I bringing this up? Many people are faced with the decision of what to do now:

• Option A is to let the policy drop.
• Option B is to buy a new term policy.
• Option C is to pay that higher premium.
• Option D is to convert to a permanent policy.
• Option E would be to see if the policy has value in the third-party market, meaning a life settlement. If my health changed, there might be an investment company that would be willing to purchase the policy. These companies are called Life Settlement Companies.

So, when your policy comes up for renewal or is at the end of its term, and you need to figure out what is the best option, give us a call. We’ll be able to shop the market for new permanent life insurance, and new term life insurance, or see if there’s any value in selling your policy.

Thank you and have a great day.

Registered Representative offering Securities through American Portfolios Financial Services, Inc. (APFS) Member FINRA/SIPC. Investment Advisory Services are offered through G&G Planning Concepts, Inc. which is not affiliated with APFS.  Strategic Wealth Advisors Network and Gassman Financial Group are not affiliated with APFS.

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