Life & Health Insurance/Mom's plan


Thanks for taking my question Willard.
Mom just told me today she recently had a life insurance policy terminate. Her agent told her she had a policy that paid for itself with the cash value of the policy. He claims she has used all her cash paying the premium and the policy has in effect become broke. Willard she has had the policy for 25 years.
Is something fishy???
Thanks for your time.

Dear Ken,

A lot depends on the type of policy it was and how much she had paid into it, as well as how long it has been since she stopped paying premiums. A lot of Universal Life policies sold in the early 1980s were projecting premium requirements assuming interest rates in the 9-11% range. If no adjustment has been made for the lower interest rates typical of the last ten years, the policy could certainly have lapsed. I would be happy to learn more about the policy she had.

Willard R. Brumbaugh, LUTCF
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(888) 792-2379

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Willard R. Brumbaugh, LUTCF, CSFP


I can handle questions concerning life insurance, it`s tax implications, how to determine what is appropriate, and how it fits in one`s estate and retirement planning.


For 2 1/2 years I was an expert on, where for most of that time I was ranked #1. I have been a moderator (instructor) for the Life Underwriters Training Council. I have been licensed since 1969. Organizations I belong to: National Association of Insurance and Financial Advisors - California and the Inland Empire Estate Planning Council. I hold the professional designation of Life Underwriters Training Council Fellow.

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