Canceling Term Life Insurance Policy Jitters

[Drake3287]

You know how the second your car warranty expires you have a major mechanical breakdown? Well, the feeling I have as I'm about to cancel both of our Term Life Insurance polices we've had for years.

Bought them years ago from Met Life when our kids were young but now that I have a sizable savings/pension and a house paid off I no longer see the need not to mention willing to pay the never ending higher premiums. I'm not sure who won in the long run, me or Met Life!

Anyone else have that dreaded feeling after canceling a Life Insurance Policy?

 

[mpeirce]

Anyone else have that dreaded feeling after canceling a Life Insurance Policy?

Nope. It was just one less bill to pay!

 

[njhowie]

You shouldn't feel remorse about having purchased/paid a life insurance policy that you never filed a claim against - you're alive today! The object of insurance is to have it in the hopes that you never have to use it, but if you do it's there. Conversely, you had the insurance as protection, that should you unexpectedly pass, your loved ones would be ok financially.

Similarly, if you are now at the point in life where you are financially secure, and the life insurance is not necessary, then you should not feel any remorse having canceled.

You won - all around. Don't think about it any further.

 

[brett]

Cancelled mine for the same reason. We actually started to decrease the coverage once our children were through college and university. Cancelled them completely when we retired early. Policy was going up, coverage down, and we had no longer had a reason to have life insurance.

 

[REWahoo]

I'm not sure who won in the long run, me or Met Life!

^ The fact you are able to post this should give you a big hint.

 

[Drake3287]

I think for me, I half jokingly worry about dropping dead the second after canceling it after all these years. No doubt my Met insurance agent will try to sell me something else which I won't be interested in, never liked her from the beginning, one step up from a used car salesman.

 

[pacergal]

We cancelled our life insurance a few years prior to retirement, kids were grown and out of the house and our pensions had a life/death benefit attached while working. Never heard from our broker again (usually he called once or twice yearly for "financial check ups")!

 

[samclem]

Dumping it makes the most sense, from what you've said.
I think a trickier situation is for the level premium/level payout term policies. As you get near the end of the term period, your mortality risk has increased compared to the first years and the real premiums have decreased (due to inflation--but so has the payout). I wonder if, at some point with some products, you aren't actually in positive territory at the very end of these contracts? You've already paid >way< more than "true" the true mortality risk for the first years, maybe at the end of a 20 year contract you are actually ahead of the curve? It might make sense to hold on to such a policy (esp if your mortality risk had increased a lot due to health, etc) even if your heirs had no especially pressing use for the dough.

 

[imoldernu]

FWIW.... how to cancel.

https://www.policygenius.com/life-insurance/how-to-cancel-your-life-insurance-policy/

Personal confession....

It was a MetLIfe policy bought many years ago that became expensive. I decided to stop paying the premiums. Never gave it a second thought, 'til I pulled out the old policy for a look several years later. Didn't know the difference between Term, and Whole life.

Yup... it was Whole Life, that had substantial surrender value... back when I stopped paying. When I finally called to check, I was told that the value had been used up to pay the premiums.

"We grow too soon old, and too late smart."

 

[pb4uski]

....When I finally called to check, I was told that the value had been used up to pay the premiums.

"We grow too soon old, and too late smart."

That is typically the default for whole life.... if premiums are not paid an automatic policy loan to cover the premium occurs... this protects policyholders who want to maintain coverage but for whatever reason the premium isn't paid.

 

[street]

We have them and with paid up, large LI policies. It always seems I look at financial situations different then most here. My unorthodox ways seem to fit me, even if wrong. LOL! Not a lot of love for them here but 40 years ago, I had no idea what my financial life would be and it made sense for me.

I have them for a few reasons and one is if either of us die, it would more then cover any SS either one of us would loose from SS.

The other reason being it is a gift when we die for one heir, with no tax to be paid on that policy.

 

[CoolRich59]

Nope. Had a policy for years, but when the kids were gone and we had enough money saved to ensure our future, I cancelled before the next premium came due.

 

[JohnnyBGoode]

I think one of the great benefits of being FI is to self-insure wherever possible. Insurance is absolutely worth it for rare but possible events that will wipe you out financially. But I think for many people it just becomes a habit. Yes, you must have auto and medical insurance, but take the high deductable path. But life insurance if you don't need it? Dental insurance? I ran the numbers and for DW and me, it made sense to just skip them. It is much cheaper, for example, for us to pay for cleanings couple a times a year and just pay out of pocket for any dental work.

Don't forget - those insurance companies didn't build those big skyscrapers in NYC by paying out more than they take in.

 

[easysurfer]

I think for me, I half jokingly worry about dropping dead the second after canceling it after all these years. No doubt my Met insurance agent will try to sell me something else which I won't be interested in, never liked her from the beginning, one step up from a used car salesman.

I have a similar sentiment but not with life insurance but LTC insurance. Kinda sick on writing a good sized premium check each year for something I may never ever need. Yet, at the same time, there is the irrational fear that once I'd cancel, something bad will happen.

 

[street]

LTC could be used tomorrow if in an accident or stroke etc. who knows. I have known a few people that LTC saved what they had worked for all their life, then again some never use it. House insurance is another thing do I really need it? My home is only worth 200k and if totally destroyed is HI really worth it in the end. I have only made one claim in 38 years of having home insurance.

 

[ERD50]

MIL passed away earlier this year, and we found she had two small policies. Really too small to do much of anything for them, even adjusting for inflation at the time they were purchased. They had savings, it wasn't like they needed "bury me" money, so the purchase really made no sense.

We recalled that DW might have a small policy purchased by her parents. I finally came across some correspondence with them in 1998. So on-line with a policy #, and after a few messages back/forth we found that there was ~ $600 surrender value, or ~ $6,000 death benefit, but only up to end of the term in 2022. IIRC, in 1998 we just decided to let the policy pay the premiums, and that converted it to this term. Really should have cashed it in back then when it was worth more, and invested it. Water under the bridge.

At this point, neither $600 or $6,000 is going to change our lives, so we decided to cash it in, just to close it out. If DW did pass before 2022, the last thing I'd want to be doing is hassling with forms and mailing death certificates for a measly $6,000.

When MIL passed, it was a bit of a pain to fill out the forms, and we actually did make a mistake on one section. It really wanted the trust EIN, but it was in the section of "applicant" information, so we mistakenly provided the applicant's (DW) SS. Stupid mistake actually, but the form sure could have been clearer, and it took several phone calls to straighten out.

Not really that difficult, but it's part of our "simplify" process. One less thing to deal with.

-ERD50

 

[ziggy29]

Insurance is something you buy when you need it, with the hope that you never actually NEED it. You didn't need it. Count your blessings!

 

[kaneohe]

I think for me, I half jokingly worry about dropping dead the second after canceling it after all these years. ......................

I know what you mean ............I decided to pay the last yr of the 10 yr term policy so that I would "win" either way............either get another yr of life or get a big reward for the survivors. Next yr, tho, looks like I hit an old-age
step function and the rate goes up by some ridiculous factor of 10(?) or so I guess that will be the end of the policy regardless of the half worry.

 

[brucethebroker]

Let my term policy lapse 6 years ago. Well over $2k a year in premiums saved EACH year since. So far, so good.........

 

[Telly]

I said goodbye to my term life policy I had for many years not too long after I turned 55. Turning age 55 stepped up the every 6 months premium cost, and another step up would be coming. Youngest child had previously graduated college. I realized "what do I need this insurance for?" The real need was over. It was past time to let it go. It had served its purpose. After cancelling it, I never thought about it again until this thread. And I'm still around to talk about it

 

[skipro33]

I was quite relieved to finally dump the term life. It meant I now had the means to cover what ever and didn't need it. Sorta like a loan; rather have the cash to just buy stuff than to borrow to get it.


I also dumped my whole life, a policy my parents bought when I was born and handed over to me to continue or drop as I felt to do. I cashed it in and used the funds to finish out my garage; sheetrock, lighting, cabinets, work benches, tool chests with tools, new lawn tools, etc. I thought it was pretty cool I got to use the policy instead of my heirs.

 

[DrRoy]

Did the same decades ago.

 

[joeea]

I'm not sure who won in the long run, me or Met Life!

Ask your family if they would rather have you around, or have the cash.

Anyone else have that dreaded feeling after canceling a Life Insurance Policy?

My policy term ended right at the point where I no longer needed it, so I just didn't purchase another policy.

But no - I didn't feel any dread at all.

 

[BeachOrCity]

Before you cancel you might want to look at the value your policy provides for the premium paid? If you purchased a level premium for 20 years term policy and you are in year 15 your policy premium is a good value right now (because of age rating and level premiums). And if it is whole life you need to look at it closely as well.
There are situations where I would say it makes sense to keep it even if you don’t need it. Such as if your assets are well in excess of your needs and you want to pass money to heirs and the policy is a good value. Not saying this applies to you but worth thinking about.

 

[mrfeh]

You know how the second your car warranty expires you have a major mechanical breakdown? Well, the feeling I have as I'm about to cancel both of our Term Life Insurance polices we've had for years.

Bought them years ago from Met Life when our kids were young but now that I have a sizable savings/pension and a house paid off I no longer see the need not to mention willing to pay the never ending higher premiums. I'm not sure who won in the long run, me or Met Life!

Anyone else have that dreaded feeling after canceling a Life Insurance Policy?

How many years are left on the policies?

We no longer need ours either, but we're going to wait until the term expires.