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How can I pay my Globe Life Insurance Premiums online?

Should my 90-year-old father continue to pay whole life insurance premiums?

  • He has three $10,000 life insurance policies. Two, Knights of Columbus and New York Life, are whole life policies that have cash value. The third is his WWII military policy. He does not need the cash flow. Should he cash out, or use the cash value to pay premiums, instead of continuing to pay premiums?

  • Answer:

    Under no circumstances should he cash out. If he doesn't need the cash, the death benefits would maximize the proceeds to his heirs (or the designated beneficiaries) and be distributed tax-free. If he does need money, at his age he can receive a life settlement of probably five or more times the current cash value; even more if he has health issues which may further decrease his life expectancy. If he's simply tired of paying premiums into the policies, at this point he can probably stop paying them without any significant effect on the policy's viability. His agent or the companies can provide inforce illustrations to show this.

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Considering his age it would be silly to cash out the policies after having paid all of these years. The cash value is probably a fraction of the face value and then some of the cash value is going to be subject to income tax. Better to leave a tax free benefit to the beneficiaries of his choice. Before you make a final decision check the policy to see when it matures. Some policies mature at age 95 and then require no further payments.

Tom Z

Probably not. The life expectancy of a 90 year old isn't the greatest, so would receiving those dollars on a taxable basis a tax-free basis be better? There's more to the question than you've provided to begin to answer it, but consider the tax consequences and the need for the coverage. This is a great question for his financial advisor.

Insurance Pickle.com

time to cash out

Ghost of Zeuz

get illustrations from each of the companies that show how long the policies continue with no further premiums. this will show how long the cash value of the policy will keep it inforce. if that won't work and the policies require regular premiums to stay inforce, you may want to surrender them and take the cash. there are underwriting companies like avs and 21st that will give you a life expectancy report on your dad if you give them his medical records, and they can tell you how long he can expect to be paying premiums on those policies based on his health. then you have to weigh whether it's better to pay the premiums for X # of years and collect the death benefit, or just surrender them now.

Because I Said So

WHOLE life, means you pay for it, your WHOLE LIFE. That's what it means. As you pay in, the cash value slowly increases, until the cash value IS the death benefit amount. If he uses the cash value to pay the premium on a whole life policy, that reduces the death benefit amount. There is no "cash flow" with a $10,000 whole life policy. Does he have a NEED for life insurance? If he's got $3,000,000 in the bank, he might as well cash these policies in and go on a cruise with the money. As always, life insurance is a financial tool. Define the job you're trying to accomplish. Is life insurance the best tool for that job? If so, keep it. If not, ditch it.

mbrcatz

He should cash out.

V

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