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Should I keep this Life Insurance?
Old 02-21-2013, 09:18 AM   #1
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Should I keep this Life Insurance?

Hi:

I have worked for a large company for a little over five years. They offer group life insurance. The Company-Paid Life Insurance (Basic Life) paid by Employer amounts to $96,000.00. I don't pay for that, so I will leave it alone.

I also enrolled in their Optional Group Variable Universal Life (EE Optional GVUL). It was attractive, in part, because their was no medical exam or other medical underwriting. This coverage amounts to $399,000.00 and I pay $39.12/month or $469.44/year for that amount of coverage.

I am 42 years old and single. I don't see having dependents in the near future. I named a sibling as the beneficiary. Due to a family dispute, that sibling is not speaking with me at this time. If I keep the policy, I could change the beneficiary to a friend, a cousin, etc.

But my question is, do you think I should continue to pay the premium on the $399,000.00 of coverage. Right now, I don't need the insurance, no one is relying on me for their support. But if I ever did need that amount of insurance, and had to go through underwriting, I suspect the cost for the insurance would be higher.

What do you think I should do?
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Old 02-21-2013, 09:34 AM   #2
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Based on your situation today I would drop it. No need for any more than what you have for free.

How's your health? Do you think your health would keep you from buying term life in the future if you should need it (marriage, kids)?
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Old 02-21-2013, 09:52 AM   #3
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My health was pretty good until the last year or two. Some difficult life events occurred and as a result I put on weight, just started to go on blood pressure medication, was diagnosed with sleep apnea, etc. I may get some of these things under control with diet and exercise, but some of it is just the ageing process. So I might be rated "standard" by a life insurer but I am pretty sure I would not qualify for "premier" rates.
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Old 02-21-2013, 09:56 AM   #4
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Do you plan on getting married within the next ten years or so? You said you don't see having dependents in the near future. Does this mean you do not think you will have child or ever adopt? Do you have aging parents that you may have to support? Do you have any medical issues that would affect getting future coverage or a family history of medical issues? Do you smoke?

Can you get a term life insurance policy for a smaller amount to have just in case? It would certainly cost you less that this universal life policy. If you MAY have a dependent, it may be worth it to replace this universal life with a 20 year term policy.
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Old 02-21-2013, 09:59 AM   #5
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That's more than I paid for 10 year term insurance when I was in my mid 40's, but not horribly far off. But I had that insurance for a reason. Without a compelling reason, save your money. Sure, you might get married and have kids, and your spouse might not be able to support them without your income, and you might not be able to get a better deal because of medical problems, but you might also separate from your current employment and lose access to this insurance. I don't think that adds up to a good probability of this insurance being useful to you.
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Old 02-21-2013, 09:59 AM   #6
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Just saw your post about your health. If I were you, I would see if you could get a term policy before cancelling the universal policy. I don't think they will care much about the blood pressure medicine or sleep apnea, but will probably require someone to come to your home and do an EKG and a few other minor tests. They may also want access to your health records.
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Old 02-21-2013, 10:01 AM   #7
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Hi Retiringat55

I don't plan on getting married in the next 10 years, but it may happen, who knows? My parents are deceased. My parents had heart disease, my father died at 70 and my mom at 83. I do not smoke or drink. I might adopt, but again, it one of those- who knows?

I will look into rates for a 20 yerm term policy. Do you know of a website that is an aggregator for life insurance premium quotes? Thank you.
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Old 02-21-2013, 10:07 AM   #8
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From what you described it sounds to me like you don't have a current need for life insurance and are unlikely to have a future need for life insurance.

If that is the case, then you don't need life insurance and your insurability is a moot point.

I would drop it and keep the employer provided coverage and reassess who the beneficiary for the employer provided coverage should be. Perhaps your favorite charity or a scholarship established in your memory.
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Old 02-21-2013, 10:08 AM   #9
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If you may adopt and you have no parents and are estranged from your sister, I would get a 20 year term policy while you can. I don't know of a good aggregator but I personally use MetLife and TIAA-CREF for life insurance. You may want to double check that your employer doesn't also offer a term plan. My employer offers several options.
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Old 02-21-2013, 10:11 AM   #10
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If it were me, I wouldn't pay for insurance I don't need just because I cannot be sure I will never need it. Even if I were to buy into the theory of getting it now to avoid being unable to buy it later, I would do so with a private policy that won't cancel on me when I leave my employer. Everything you spend on insurance for a need you do not have is wasted.
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Old 02-21-2013, 10:54 AM   #11
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Another thing to consider is your assets. If you have substantial assets to leave to you heirs then you don't life insurance.

Based on the info provided I would not take the additional insurance.
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Old 02-21-2013, 11:13 AM   #12
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Can you keep the policy if you leave the company? if not, you might consider dropping it and adding the cost of the premiums to your retirement vehicle.
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Old 02-21-2013, 11:29 AM   #13
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hi timo2

I am not sure if the policy is convertable if I leave the company. It may be, but the premium amount may not be as attractive. I am going to check that out. Thanks.
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Old 02-21-2013, 11:48 AM   #14
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Based on the situation you have outlined, I don't think I'd keep the additional insurance that you are paying for. As others have indicated, if you ever do find yourself with dependents, then you can reconsider your total assets at that point. You may still not really need it.
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