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Please advise: Should I continue buying Variable Life Insurance?
Monthly payment $250 since 2004, for a $500K. Should I stop it or continue? Thanks for any comments.
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In this situation, you probably want to clarify the current situation first (even for yourself), then think about what could be done to rectify it (including keeping it).
So, you've had this for 5 years. How much have you put in, in total? What is the current cash value? There is probably a shortage between the total payment and cash value. What is the cause of this? Part is undoubtedly insurance premium, which is known to be high for a VUL product.
On top of this premium cost, is there any investment loss? If there is, then you need to think if this is expected/reasonable. Suppose that you had this much money in 401K or IRA, or plain stock/mutual fund, what would it have been. Will you do better, given this past 2 years performance?
Once you have a clear picture, you can think about what to do next. Life insurance (including VUL) is basically a vehicle to insure (plus save in case of VUL) for the future. Has your perception of future changed?
Your VUL probably have a high early cancellation fee. If you want to cancel, how much further loss would you incur? Compare with the total premium that would have cost if you keep the policy. Which is higher? Remember, in keeping the policy, you're insured. If cancel, you'll need to make sure that you have enough coverage from other way.
Hope this helps.
sunskitehomes.com
Please advise: Should I continue buying Variable Life Insurance?
Monthly payment $250 since 2004, for a $500K. Should I stop it or continue? Thanks for any comments.
===========
In this situation, you probably want to clarify the current situation first (even for yourself), then think about what could be done to rectify it (including keeping it).
So, you've had this for 5 years. How much have you put in, in total? What is the current cash value? There is probably a shortage between the total payment and cash value. What is the cause of this? Part is undoubtedly insurance premium, which is known to be high for a VUL product.
On top of this premium cost, is there any investment loss? If there is, then you need to think if this is expected/reasonable. Suppose that you had this much money in 401K or IRA, or plain stock/mutual fund, what would it have been. Will you do better, given this past 2 years performance?
Once you have a clear picture, you can think about what to do next. Life insurance (including VUL) is basically a vehicle to insure (plus save in case of VUL) for the future. Has your perception of future changed?
Your VUL probably have a high early cancellation fee. If you want to cancel, how much further loss would you incur? Compare with the total premium that would have cost if you keep the policy. Which is higher? Remember, in keeping the policy, you're insured. If cancel, you'll need to make sure that you have enough coverage from other way.
Hope this helps.
sunskitehomes.com
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