Life Insurance Question

[tryinghard]

Her is the quick verson. More details available upon request.

Spouse and I are both close to 50. We are healthy/happy, lots to be thankful for and we are.
Income is stable, we have had challenges due to ecomony but we are doing ok.
This is our issue....(one of them at least.lol)

We took out whole life/ universal policies when we were first married. We realized this past december we have approx 75k in cash value. The payments are approx 375.00 total.
We suspended payments for a few months as spouses income was cut due to economy ( works for small company... it is all going in the right direction, he loves it there, owner is great so we are ok with these things.) I work in banking, provide the health insurance for the family and contribute a good chunk to our 401k/roth.
Today... we would not qualify for cheap term insurance. We both have a health issue that would prevent us from good rates, I would probably be denied. (even though I am healthy/rarely miss work and all that jazz)
So..... are we stuck with these polices? We did take 10K out to pay for roof.
We plan to stay in our house... payment piti is approx 1300 rounded up a lot of equity. Things are going well but we are still working it every month. Meaning we save with 401k/roth (about 1K total for the both of us every month ) the rest goes to house/food , utlities etc. We have a strong EF ( about 30K) . Retirement savings has approx 475K but are we really doing enough?
DS graduates in spring and will be attending CC. He has a disability but is doing great, but we feel the support may be needed in the future.
Any idea? Right now we are having the cash value make the payments to give us a little break. We want/need to do some things in the house.

Thanks so much,
Trying Hard.

[Deleted]

One thing you might consider is separating the issue of insurance for you and insurance for your husband. You might be denied for a decent rate for term, but would he? It would depend on the specific health issues involved, but it might be worth checking out.

How much "insurance" is this $375 buying in total? Are you depleting the cash value by $375 a month while the cash value makes the payment.

And why the mention that you want/need to do some things in the house? Are you asking "permission" to cash it in? If so, I'll sign the permission slip. Add it to your EF, though, and save for the things you want to do in the house.

[973beachbum]

Feb 2, 2011 16:45:24 GMT -5 @franktheimpaler said:

Why not do a 1035 exchange (tax free) to a fixed or variable annuity on a partial ($50k) so you have options....keep your present policy.

The balance of 25,000 @3% would throw off $750 dollars a year...which would be more than enough cash value so that you would never have to pay premiums again.


You could then take a monthly income from either the fixed or V/A or just let it grow for some future purpose

I agree. If you can do this and I think at this point take out 40K additional since you said you took out 10K already. Check to see if you get 3% though. Interest rates are pretty low in general and even this might be a stretch for whole life policy.

I am sure at your age and with your health underwriting issues even if you could get more life ins it would be very cost prohibitive. As long as you have any reason to need life ins you should keep this.