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We are getting term life insurance. Should we cancel the whole life policy?

Before my husband and I purchased a home, he had a basic whole life policy. Now that we are homeowners, we need more coverage, so we are adding a term life policy that is probably six times larger than the original whole life policy. Because he has diabetes (he is only 32), the cost of the term life policy is kind of expensive. We are wondering if we should cash in the whole life policy and save the extra money from not having to pay the additional monthly premium? Or is there a benefit to keeping both policies?

Public Comments

1. Keep both policies! The term insurance will not give you any cash value no matter how long you continue the policy. Whole Life has a cash value, which given time, you can lend it to yourself....and if you pay on it long enough, there will be enough money in the account to pay for itself!
2. The advantage with the whole life policy is that 30 years from now the premium will not be any higher than it is now. How long have you had this whole life policy? If money is going to be too tight you should call the company that you have the whole life through and ask what your options are. If you had the policy long enough, you may be able to change it to Reduced Paid-Up. Ask about this. Also some policies will let you change how the dividends are applied. Currently they are probably used to increase the cash value. You may be able to change this to have the dividends help pay the premium. Many people will tell you that whole life is bad, but when you are 85 years old you'll regret having cancelled the policy as you will no longer have any term life insurance because it will be way too expensive.
3. Whole life and universal life are great IF you can afford the proper amount of protection. The problem is that most people can not afford the right amount of coverage so they end up being underinsured. If your main concern is to cover the mortgage debt, provide for kids, provide an income to you if your husband dies, dump that whole life and get term insurance. As far as whole life is concerned, if you buy a term policy with a good conversion privilege, it will give you the option to convert to permanent insurance at a later time if you need coverage beyond the term. Assuming good control for diabetes, etc.. you can get $500,000 of 20 year term coverage for about $60 per month. $1 million of 20 year is about $115 per month. There are a number of companies available that specialize in underwriting diabetes..
4. UNDER NO CIRCUMSTANCES SHOULD YOU CANCEL THAT WHOLE LIFE POLICY!!! Your husband has diabetes. While it may be under control now, there's no guarantee what his condition will be like in the future. Nobody can ever take that whole life policy away from you or increase the premium on it no matter what happens to your husband. You will always need some kind of insurance. The term will eventually run out or will be renewable at a much high price as he gets older. Having that whole life policy gives you a guarantee and some security for the future.
5. Whole life policies are a major (MAJOR) rip off.... but in your case I suggest keeping it. As you've already learned there is a value to insureability.... I have heart desease. Prior to getting sick I purchased a fixed premium (30 year term) policy (it was cheap, AAA+ company). Now I can't buy anymore insurance... but I'm glad I've kept what I had!!!!!!!!!! I've also invested the difference from a whole life policy I almost purchased. Now I've got cheap insurance & a nice sum in the bank!!!!!!!
6. Hi- I HIGHLY recommend you keep the whole life policy. The premium is fixed for the rest of his life no matter what. Also if you opted for a reduced paid up option, the cash value can greatly grow and eventually the dividends will pay the premiums for you. Ask your insurance agent about "N Pay" and when it will occur. Regarding term insurance- you will be amazed how much renewable term life insurance will cost the years following your initial term. I'm not talking double. I'm saying ablut a 10 fold increase or more if you have a 20 year term policy. Keep em both. If anything happens you will be covered.
7. LISTEN TO ME! Term is the most affordible of all insurance. Go talk to Primerica representative. I am sorry that you were duped into that whole life policy. When you cash out your cash value, do this-tell them you want to surrender your policy- this way you'll get as much of your cash value as you can. They keep part of it. I don't want you folks to suufer, I am so sorry.
8. OK, the minority (all two of you) that are recommending dropping the WL are complete and utter idiots. Did you read the question? The insured has diabetes! Dear Neutralparty, Listen to the sane answers of the majority of the responses you've gotten. That term insurance policy that you have is only going to keep you covered for a while. If you purchased a 20 year level term policy you can expect your premiums to increase in year 21 by 500% or more, possibly much more. What these term pushers won't tell you is that 95% of term insurance never pays a death benefit because the policies are lapsed or replaced. Don't take this as a rant against term insurance. By all means, you need it. Just be sure to KEEP THE WL because it will be your husband's only coverage once the term policy is dropped. Also, stay away from anyone who tells you how much coverage you need by multiplying your income by an arbitrary number. And don't believe the Primerica hype, they aren't advisors, they are term insurance salespeople.
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