Life insurance is something that is vital for every adult, and some children. Life insurance provides a death benefit when one is needed most, when someone has died. There are multiple types of life insurance including term, universal life and whole life. Within those broad categories there are certain subsets like annual renewable term insurance, variable universal life insurance, indexed universal life insurance, blended whole life insurance etc. I try to help people understand how much and what kind they might need to research.
It has been over two years since I last reviewed my insurance policies, so I figured it was time to check in on them – and I am glad I did! The main reason I am glad I took a look at them is because my contingent beneficiaries were all wrong! I live in this life insurance, estate planning world and even I forgot to update my beneficiaries when my daughter was born. Please if anything, take this opportunity to stop reading and make sure your beneficiary statuses are correct.
In addition to checking the beneficiary statuses, I wanted to see what my permanent whole life policies grew to. I don’t include any of these numbers in my net worth because they are tiny and also I don’t look at the cash value as something that is even in my control for decades.
Reviewing My Life Insurance Policies
- $1,000,000 20 year term from a low rated cheap provider
- $1,000,000 20 year term from a AAA rated mutual life insurance company – it is my hope one day to start converting this policy to permanent coverage
- $44,704 (originally $44,444) 10 Pay Policy with a Cash Surrender Value of $1,937 – This policy will be paid up in 2023 providing a small death benefit to my family no matter when I die (i.e. after 2023 it can not lapse and no more premiums are due).
- $105,582 (originally $100,000) Whole Life Insurance Policy with a Cash Surrender Value of $2,827
My expenses haven’t increased all that much so I don’t feel the need to increase my coverage but I have contacted the selling agent (my buddy) to update my contingent beneficiary statuses to include my daughter. I need to kill off some debt payments so I can convert some of the term.
The Wife’s Life Insurance Policies
- $500,000 20 Year Term from a Great mutual life company
- $250,000 Blended Whole Life Policy (one year term portion is down from $150,000 to $148,460) with Cash Surrender Value of $1,764.
- $120,790 (up from $120,350) Whole Life Insurance Policy with Cash Value of $80.
Again, I don’t need to increase my wife’s coverage. I’d love to maybe put a few dollars to help the blend, but that would be it.
My Children’s Policies
I am a big proponent of life insurance on my children. The Wife is not, but for $50/mo for each child it isn’t the end of the world:
- $135,780 (up from $135,741) Death Benefit for my Daughter’s children one day in the long long future with Cash Value of $10.44 – This policy only went into force in April of this year.
- $135,455 (originally $135,000) Death Benefit for my Son’s children one day in the long long future with cash value of $1,085
These are on auto-pilot with the hope I can sign them over to them one day when they have their own family.