Gerber Life Insurance - Teen now 21 now what?

[DHK]

You only ask "Do I need life insurance?" BEFORE you apply.

The life insurance is already in place. Do you WANT to keep it? Does it make FINANCIAL SENSE to keep it? $10/month is a no brainer.

Now, if it was going to be $100/month, $500/month, $1,000/month, or even $10,000/month... then the question may have more validity on whether or not to buy it.

If she has a family that would be worse off if she didn't buy it, if she owned a business that would collapse if she didn't buy it, if she had student loans that would not be forgiven at death... if there is no 'need', then there's no reason to buy it.

But since the policy already exists... the questions above are all that need to be considered.

 

[LostDollar]

Death benefit is 30k. She can cash out now and get 2600 or keep paying 104 a year. Suggestions?

Or, in regard to family financial resource, if she would really rather have the cash now and is not concerned about the insurance, perhaps you could ask her to transfer policy ownership to you in exchange for $2600-$3000 and then you keep paying the premium.

 

[Life Hawk]

Death benefit is 30k. She can cash out now and get 2600 or keep paying 104 a year. Suggestions?

Just a few moments ago I covered a lady in her late 50's who because of cancer history had to get a guaranteed policy (will not take full effect for 2 years) of only $5000.00 that will cost $380 a year.

If your daughter were mine, I would advise you to keep the plan. Two things that adversely effect future coverage, health and age. You will never be able to purchase what you have now for what it cost.

Keep it.

 

[NewbieNewbie]

Other option is a 1035 exchange to a single pay and a couple hundred bucks and you got a paid up policy for 30k. Not soliciting, but that is what I would do. Depending on the carrier you may not even need the couple hundred.

 

[Amy Jones]

Can you explain the 1035 exchange - I don't understand the benefit..

 

[LostDollar]

Other option is a 1035 exchange to a single pay and a couple hundred bucks and you got a paid up policy for 30k. Not soliciting, but that is what I would do. Depending on the carrier you may not even need the couple hundred.

(Not an agent.)
Wouldn't the wisdom of that depend on the nature of paid up additions clauses to the policy? I have a whole life policy that has a current death benefit approximately 2.5 times its original face, and I'd have to dig out some files to verify this, but I think I get a larger increase in paid up insurance each year than the annual premium I pay. Those things are of far more value to my family than a policy restricted to the originally issued face would be.

 

[goillini52]

Can you explain the 1035 exchange - I don't understand the benefit..

It allows you to move your money without paying taxes.

 

[eersfan]

I personally think that is not the only thing to consider. I find that I have some resources available to me now, because of life insurance, that I did not acquire in other ways.

The premium represents a "bargain", it represents a way to save, and it accumulates a resource that may be of use a long time from now, addressing some need that is totally unanticipatable when current circumstances are viewed. Just opinions from "looking back down the road".

My "Do I need question" was before the OP came back and said it was $104/year...not/month.

 

[Life Hawk]

It allows you to move your money without paying taxes.

In truth... you always pay taxes... maybe not now... but you will later.

I think I want to 1035 exchange Illinois for another state.

 

[goillini52]

In truth... you always pay taxes... maybe not now... but you will later.

I think I want to 1035 exchange Illinois for another state.

We at least need to 1035 Madigan to Iowa. Have you seen the comercial where the Governors of Missouri(he's in hot water), Indiana and Wisconsin thank Mike Madigan because all of the businesses are leaving Illinois and going to their states.

Funny, but true.