Broker Check

To Settle or Not to Settle?

| January 30, 2024
This month's edition is going to be a rambling jumble of thoughts. I'm going to touch on a topic that has been bothering me for some time.
Term Life Insurance - as I think back over the vast quantities of term insurance that we have marketed through our business to consumers, I'm floored by the fact that people have aged out and have been caught with their term policies expiring outright, or being offered ridiculously high new premiums, or not being offered anything except a conversion privilege.
Yes, we covered their families when their kids were small or the mortgage was high. And we did it for pennies on the dollar. Everyone in the transaction felt good about it. The client felt good because they were not spending a lot of money and they were doing the right thing and taking care of their family in case of an unexpected death. But let's look at the rest of the story. I think there's a real lesson here for anyone who reads this.
I subscribe to the belief that if you're age 55 or older, you are about to suffer ailments that are not a good thing. I called this The 3 Stooges of Health. They are, in no particular order, high blood pressure, type 2 diabetes adult onset, and the ever popular atrial fib. At age 55 I was in great health, by age 57 I had a list of medications that I couldn't believe I had to take. I had been diagnosed with the Big 3.
So let me give you the good news. If you are thoughtful and proactive in your planning with a financial advisor, they will advise you to look at some sort of permanent insurance that most probably can be designed as a limited pay for coverage for the rest of your life, Perhaps it is a 20-year payment plan, or less. But this does not mean that your insurance stops, like it does with term insurance, rather it continues! The only thing that would stop would be the pain of premiums. Who doesn't want that?
Good planning will not solve your health issues but good planning can guarantee your family could benefit by your having life insurance later in life instead of having a policy that runs out and no coverage is provided to the family because you can't afford the yearly increasing premiums once the term period has ended.
We are working with a number of clients on what are called Life Settlement cases. 
So if you happen to be one of the many clients that we have and you get a letter saying that your term insurance premium is going to go up, please call us so that we can run an audit on the policy and tell you if one of the life settlement companies would be willing to take it off your hands and pay you CASH for that policy.