Switching from Term Life to Whole Life?

[harvon]

Hi, this question is for my dad who just turned 69 a couple months ago. He is currently purchasing term life for $100,000 at a premium of over $800 a year until he turns 75. He does have high blood pressure and diabetes that are under control. At this point, it seems thankfully that he will live past 75 so we were just wondering if it is feasible to switch to whole life or universal life for similar amount of benefit.

I know nothing about the subject except that with whole life or universal life you do not have to worry about "dying too late". At this point I am overwhelmed by the different products and terminology associated with these kinds of plan. All I know is that it would probably require a massive premium but I do not know what would be a "fair" number.

Can someone please help stir me in the right direction to begin my research?

Many thanks and happy holidays!

 

[FEX Quotes]

Hi, this question is for my dad who just turned 69 a couple months ago. He is currently purchasing term life for $100,000 at a premium of over $800 a year until he turns 75. He does have high blood pressure and diabetes that are under control. At this point, it seems thankfully that he will live past 75 so we were just wondering if it is feasible to switch to whole life or universal life for similar amount of benefit.

I know nothing about the subject except that with whole life or universal life you do not have to worry about "dying too late". At this point I am overwhelmed by the different products and terminology associated with these kinds of plan. All I know is that it would probably require a massive premium but I do not know what would be a "fair" number.

Can someone please help stir me in the right direction to begin my research?

Many thanks and happy holidays!

Unless he has a specific need for the next five years, five year term is pointless.

He should be able to obtain 100k of guaranteed UL to age 121 for about 3,000/yr.

 

[LGilmore]

Who is the insurance company and what product is it? Is it convertible to permanent?

Are you sure it's only $800 a year for 100k for a type II diabetic? Doesn't sound right at all. Is this an accidental death policy?

Can you provide more information? Thanks.

Or has he had the policy for a while and his conversion window is about to close?

 

[harvon]

it is with west-coast life. He was not diabetic when he first got it (12/01/2003) so maybe that explains the rate (it is locked in for the first 20 years I think).

Not sure about being convertible. How does it work if it is and would that be a better way of doing this? I mean why would a company allow you to get $100K if you only pays them around $60k assuming he lives for another 20 years (I don't know the rate, I'm using the number of FEX Quotes as an example)

and is universal life better than whole life? thanks!

 

[BYSFG]

it is with west-coast life. He was not diabetic when he first got it (12/01/2003) so maybe that explains the rate (it is locked in for the first 20 years I think).

Not sure about being convertible. How does it work if it is and would that be a better way of doing this? I mean why would a company allow you to get $100K if you only pays them around $60k assuming he lives for another 20 years (I don't know the rate, I'm using the number of FEX Quotes as an example)

and is universal life better than whole life? thanks!

Is universal better than whole life, yes and no. Depends on what your objectives are. Universal is flexible, you can adjust the death benefit and premium to fit your current situation. The risk is shifted a little more onto the client though. You'll be responsible (along with your agent) for what a good premium amount would be. Too low and the policy could face some issues down the road. Not sure about that company, but most carriers I'm contracted with, their universal life rates are somewhat in the low end. Tough economy maybe?

With whole life it is not flexible as mentioned above but it is more of a "you get what you paid for." Long as you pay the premium for x-amount of coverage, the policy stays enforced. It's a fixed product. Immediately looking at the two, whole life will be a little more pricey but that's usually how it is with how the premiums are stretched out relative to the mortality table.

More or less as a role of thumb, if you're going to look at a universal life policy for 100k in coverage, you should be paying in premiums an amount similar to a whole life policy for 100k.

I'm not too familiar with the carrier you mentioned, West coast life. If they have a permanent product (whole life, universal life etc) then a conversion may be possible, you'll have to check with the carrier for conversion deadlines etc.

Hopefully i didn't confuse you and I'm sure the other forum members will do a much better job at this than I.

 

[pfg1]

If he's insurable now, don't waste time with a 6yr term product. ?? not sure what is up with that or if its correct. Unless you know for sure what the conversion options are, and that they are what you want and plan to do.

I'd look at either 20yr term, or GUL... if he's interested in the least out of pocket. Just keep in mind, the GUL being permanent will have ongoing premiums. They will probably be close in cost is my guess, due to age.
I personally am a big fan of whole life, more so than UL. But it has to be the right fit. Hard to say in your situation, we don't know enough info. WL will definitely be more expensive than term or GUL.

 

[harvon]

thanks for all of your replies. I know I didn't provide enough info because I am not sure about the whole thing. What other information do you need that I may provide?

I will call west coast. what I read about them is that they like to convert people to their variable universal life, so I guess the premiums will just skyrocket year after year, unless there is a max premium for a universal life policy.

We are fairly financially stable now. So I guess we are just looking for something that would cost less than the death benefit itself in the long run.

 

[LGilmore]

Thanks for replying.

Your dad is blessed that he bought that policy (if convertible) when he was younger and healthier. A conversion allows him to purchase a new policy without showing his current health. They will go off of his health status on the old one. Which in this case is a blessing.

Now you will not have a choice of all their products. They will have one or two plans he can convert into. Most likely universal life. Think of it as lifetime term and it works just fine. Contact the company and have them run illustrations for you for the year you want coverage to run to. like 85, 90, 95 and so on. They can show you what premium is needed to get there. DO NOT REQUEST MINIMUM PREMIUM. You mentioned trouble, well that's how you get into trouble with a universal life. You just want it to be life insurance, savings is not a concern. You just want it to run correctly until the date you want it to end.

If you do it the way I suggest, the premiums will be level.

Hope this helps.

 

[WinoBlues]

Hi, this question is for my dad who just turned 69 a couple months ago. He is currently purchasing term life for $100,000 at a premium of over $800 a year until he turns 75. He does have high blood pressure and diabetes that are under control. At this point, it seems thankfully that he will live past 75 so we were just wondering if it is feasible to switch to whole life or universal life for similar amount of benefit.

I know nothing about the subject except that with whole life or universal life you do not have to worry about "dying too late". At this point I am overwhelmed by the different products and terminology associated with these kinds of plan. All I know is that it would probably require a massive premium but I do not know what would be a "fair" number.

Can someone please help stir me in the right direction to begin my research?

Many thanks and happy holidays!

The West Coast Life is Protective now. The conversion option is probably gone now. Off the top of my head, it was something like ten years or age 70 whichever came first. I would defiantly call before he is with in six months of 70 or better yet have an independent agent do a three-way call with your dad on the line to give them permission to speak to the agent. I sold a lot of West Coast back in the day. They used to have more conversion options. I believe it is one maybe two now. Neither one is a Guaranteed UL or great options. I believe they are pro classic and a IUL.

If Convertible, you are looking at about $2,900 for an equivalent of a ten year termUL. It could most likely be projected out further with more premium.

Now, can he do better? That is going to take working with an agent that will ask you all the quote questions.

Lee

Edit: Oh by the way, The Pro Classic goes down to $25,000 so you can dial it down get the premium lower.

Edit Edit: If conversion is not available He very well could qualify for a SI Whole life plan with very little underwriting. If he needs/wants the $100,000 he could still qualify for a fully underwritten plan. I would not sit on getting the information but I would not panic either. Many of us write diabetics fairly regularly.

Lee

 

[Mattschmidt]

If converting isn't an option I'd seek out an agency who ONLY works with people with Diabetes. Calling someone a diabetic is outdated

Work with a specialist not a generalist