Friday, October 20, 2006

new insurance policy issued (for me) - prepare to ditch bad old policies!

We finished the confirmation of receipt for my new insurance policy. My wife's policies are already in effect.

All policies are term held in ILIT's Irrevocable Life Insurance Trusts. We gift the trusts money each year. They pay the premiums. When we die the proceeds bypass estate taxes and probate. Not bad.

Now I have my eyes set on the old whole life and variable policies. My new premiums are less than the old variable and whole premiums, but provide twice the coverage at a level premium for 30 years. All the time a late 30s business executive needs.

The whole and variable policies have approximately $70k in investments and cash. At my investment advisor's request, I will contact a third party to evaluate the economic sense of liquidating them - I'm fairly certain it makes sense - but it would be good to obtain a second oppinion. Apparently unusual circumstances render it inadviseable - usually after a certain amount of money has been paid in.

We shall see. I'd like to get the money out of the hands of the blood suckers. I imagine my aggregate expenses exceed 2.5%. Compare that to Vanguard's S&P 500 fund!

Have a wonderful weekend,
makingourway

2 comments:

Amaranta said...

who would you contact to evaluate the liquidation? (ie what kind of advisor) and are your policies strictly term?

makingourway said...

amaranta,

Go the American Consumer Federation. They have a service. It costs between $50-$75 per policy to have them evaluated. I'll put up a posting on my experience when it's complete.
Here's the link.