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Whole Life

Submitted by nhbergh on 16 October 2010 - 11:41am

I cannot see how I can enter the SBLI whole life policy we are considering buying. It is a conversion from the term life which we now have. With the whole life, the cash value grows. If we also leave in the dividends, the cash value grows accordingly, plus we can take out partial payments if we need them.

How do you suggest entering that information?

‹ Understanding need for retired parents Term life insurance ›
Submitted by Dick Munroe on 17 October 2010 - 7:19am.
1

Whole life insurance is a REALLY bad idea (Larry can give you chapter and verse on why) but you should be able to treat it like a reserve fund (which is what it feels like to me). Otherwise, you're basically going to have to go with special receipts and expenditures and carry the "value" of the life insurance off the books. Contingent planning should allow you the flexibility of getting the life insurance pay out into the economy of the survivors if you're doing estate planning as well.

Best,

Dick Munroe

Submitted by nhbergh on 17 October 2010 - 8:16am.
2

Thank you. I will be interested to hear what Larry says, but we probably know. We never considered it until now, but in out current situation, it seems like a good plan. We are at retirement age, my husband's medical condition makes him pretty much uninsurable. His current term life policies, which he has had for many years, have an option for conversion without medical exam. If we don't exercise that option this month, we lose the chance. From looking at the numbers, it seems like a no risk proposition. With the dividends taken into account, the yearly cost is just about the same as the term life costs in our age bracket. Unless we are going to drop the life insurance entirely, the conversion to whole life seems to make sense.

I'll try that reserve account feature.

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