Life Insurance Fatigue

One of the steps in our process with new and existing clients is to review their life insurance needs and existing policies.    Often times, we run into older policies with cash value that has built up.  I often get the question “Should I just cash this thing in?”, particularly as the family has grown financially stronger over the years and the owner of the policy may feel plain tired of paying policy premiums. 

I will never tell someone to cancel or cash out their life insurance policy.  Why?  How can I know when they are going to die?  It’s inevitable for all of us:  we just don’t know when our expiration date will be. 

One way to think about such a decision is looking at the policy objectively based on facts instead of subjectively based on emotion.  How much money is the cash value worth?  What is the guaranteed death benefit?  What kind of ongoing premium is required?  Is there another investment with a guaranteed payout that can beat your contract?  Notice I used the word contract, because that is exactly what a life insurance policy is.  As long as you keep up your end of the deal and the life insurance contract stays in force, the insurance company is contractually obligated to pay out the death benefit to your beneficiaries upon your passing. 

Should you cash out your policy?  Only if you have a better option.  Just be sure you are not making the decision based on life insurance fatigue. 

LouAnn Schulfer of Schulfer & Associates, LLC Wealth Management can be reached at (715) 343-9600 or louann.schulfer@lpl.com.  SchulferAndAssociates.com , louannschulfer.com or louann.biz 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Guarantees are based on the claims paying ability of the issuing company.