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luckydriver

whole life insurance. do you ever stop paying for it?

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person is 71 and the insurer is offering to change a 35 /month 10K term policy into a whole life policy for 61 per month. they already paid 4 years into the policy. if my math is right, by the time they are 84 they would have paid 10K into the 10K policy.

 

i'm assuming you stop paying all premiums at that point since you would never get more than 10K out of the policy but wanted to post here and see

 

also do you then just get your money back or do you have to wait until you die to get your money back ;) 

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No it doesn't work that way.  Conventional life insurance you have to keep paying the premiums until death, then the benefit amount is paid. 

 

With term insurance, should you live past the term it becomes worthless.  That is why it is less expensive.

 

In general it isn't worth it for old people to buy new life insurance policies.

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holy cow..seriously? so she would keep paying after she got to the 10K threshold just to recoup 10K. that sounds crazy. who would do that? if she lived 10 more years that would be 17000 to get 10K back. 

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they dont explain any of that on the faq sheet very well though. that sounds like would be a selling point. hope she gets the answers in a phone call

 

she's ok if its used as forced investment for 10K but if i tell her she has to pay it even after she gets up to 10K that may not be so appealing

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There are options for a whole life policy where you can stop paying premiums, but I doubt any would apply in this case.  

 

There are also term policy conversions to whole life - which means she could get the policy with  no underwriting involved - again, no point in it at this life-stage.

 

I think most of the popular interpretations of different types of life insurance are incorrect. 

 

 

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26 minutes ago, breeze said:

There are options for a whole life policy where you can stop paying premiums, but I doubt any would apply in this case.  

 

There are also term policy conversions to whole life - which means she could get the policy with  no underwriting involved - again, no point in it at this life-stage.

 

I think most of the popular interpretations of different types of life insurance are incorrect. 

 

 

this is whats being offered. term to whole life. also my theory is if someone is offering something it probably benefits the company more. 

 

cynical but probably true. 

 

if turns out she has to keep paying well after the 10K is put in the policy in premiums i cannot imagine she would want to continue but then there's that few thousand already paid in the term the past few years.. sigh. i think its AARP , not that it means anything. but would be sad to have spent all that and then stop. 

 

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as a total aside. a friends mom was offered 100K for under 400 a month. age 77. whole life. i couldnt believe it sounded too good to be true. i looked at the policy and i emailed the agent myself with specific questions. he answered them all. indeed if she died a month after signing she would get 100K. took months for doctors reports etc to be done too. thats quite the deal there if you ask me. even after 15 years of payments that is only 72K.  

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