Should I unload my Variable Life Insurance?

Question

I have had this variable term life insurance policy for almost 10 years now and it hasn't kept up with the projections the sales guy told me 10 years ago. This is mainly due to the high fees. About 55% of my yearly contribution is lost in "fees". There would be a surrender charge if I were to withdraw. Should I take the hit or keep putting an annual contribution into this account? I do have life insurance through work should anything happen.

Answer 1

yes, variable life ins and variable annuities are the worst.. get rid of it.. put the $$$ u would save into another investment vehicle.... possibly another TERM life ins. if you see that this is a needs based product for you.. it's imp to have enough life ins. to cover lifetime family expenses (if this suits your needs) if not then don't worry about it... put it into something else there are tons of cd's out there that are offering over 5++ % try ING, your bank, etc.. put it in the stock mkt... anything would be btr than where it's at Good Luck!!!

Answer 2

Without having your policy in front of me, some things must be assumed. Your surrender charge may not apply since you have had the policy for 10 years.

You don't mention the numbers involved, or the projections, or your age, or the reasons you originally decided to get VL.

You might seriously consider the returns offered by a no-load mutual fund and see if you could do better yourself. The only reason you might want to keep the policy is if you have no interest in investing the money yourself, and you don't want to take the hit.

Another way of looking at it - there are limited tax advantages to higher income individuals. If you don't consider yourself to be in the higher income group, then you probably aren't getting the benefits - and should drop the policy. An exception might be if you expect to be in poor health later, and can't get term insurance.

Answer 3

Rather than say yes or no like the previous poster, I want you to consider a few things first.

It has been 10 years since you applied for insurance. Has your health gone down which may make insurance more expensive or make you not insurable at all?

Are you currently underfunding the policy? The only reason 55% of the costs are going to fees is because you are not socking enough away, meaning not enough is being invested, and therefore it wil not grow fast enough.

in 1996 the markets were great, and variable policies were definitely en vogue.

I can't make a recommendation because I don't know your situation.

In my opinion, you should speak to a financial advisor who is knowledgable in life insurance to help assist you with making the decision. don't just talk to the local insurance salesman who tells you specifically term, whole life, UL..... etc... have them educate you so you can make a good decision.

Answer 4

No one here can answer your question unless you want to post all of your personal financial and health information here.

Your best bet is to go talk to a financial planner in your area. Expect to pay a fee to get the best answers for YOUR situation.

Good Luck.

Answer 5

Take a look at this one. Great price for Single or Family!

Answer 6

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