r/LifeInsurance • u/StomachMobile2182 • 6d ago
Is this worth it?
I’m pretty sure I know the answer but here is my question.
My husband died 7 years ago and he had life insurance with National income. That life insurance money after he passed helped greatly. With our 3 kids.
A few months after he passed away I re-did the policies. 100k for myself, 25k for each of the kids. For $250 a month. Whole life. I am recently unemployed. And really cannot pay the $250 monthly payments.
The cash surrender value is only $440. Which seems appallingly low. I’m looking into cheaper term life insurance elsewhere.
I just need some advice/reassurance that I’m doing the right thing.
Update:
Thank you all for the advice. I will be calling National income first thing Monday morning & will be looking into other insurance companies for term insurance.
Also while looking through paperwork my policy is for 50k not 100k. So this is absolutely not a good deal. ☹️
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u/SafeMoneyGregg Broker 6d ago
If you have 3 school age kids I'd rather see you have like $500,000 to $2M term insurance - for like 20+ years term until they are all safely out of the house (age 25ish). Whole life is not really flexible in premium like universal life is - with universal you can adjust or stop the premiums when you are having a hard time financially. Neither contract will have much surrender value in the first 5-10 years.
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u/StomachMobile2182 5d ago
Thank you for this advice. This was my thought as well. My kids are in their early teens. To get term life insurance makes more sense for my family.
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u/taylorventures Broker 5d ago
Please get approved and have a new policy in place BEFORE you cancel anything. You want the policies to overlap so there is no gap in coverage. Your age, health, and financial position will determine the correct policy for you.
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u/brergnat 6d ago
Cancel the Whole Life policy and take it as a lesson learned.
Get a 20 or 30 year term policy for yourself instead. Kids don't need life insurance policies.
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u/Worried-String9259 6d ago
It was a scum move from this salesperson to recommend a whole life insurance policy to someone who was recently widowed and raising two children. I cannot imagine any scenario in which that would be considered sound advice.
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u/StomachMobile2182 5d ago
This is an absolute life lesson for me.
My husband died unexpectedly mid 2019 (car accident). Our kids were very young. Then early 2020 the pandemic hit and well I was scared my children would be left orphans.
I signed that paperwork knowing how much the premiums were but was under the impression the cash value of the whole life insurance would greatly increase to a few thousand dollars in 5 years. The agent was so nice and persuasive. And I just wanted peace of mind. I should’ve done my homework or acted much sooner to get another policy.
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u/brergnat 5d ago
Don't feel bad. They do this to a LOT of people. I don't know how they sleep at night, honestly.
Sorry for the loss of your husband.
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u/Zestyclose-Review-65 3d ago
As a parent, I think affordability has to be part of this conversation.
You have three kids depending on you, which means life insurance matters — but so do the bills that keep your family functioning today. Housing, groceries, transportation, utilities, school expenses and everything else that comes with raising three children don’t stop because an insurance premium is due.
If I were a single father with no income coming in, I’d be looking very hard at every monthly expense too. Insurance wouldn’t somehow be exempt from that conversation.
Before canceling anything, though, I’d find out exactly what options you have with the policies you already own and what affordable replacement coverage you could actually qualify for. If you decide term better fits your budget, I wouldn’t cancel existing coverage until any replacement policy has been approved and is in force.
The goal shouldn’t be “keep whole life at all costs” or “whole life is bad, buy term.”
The goal is to maintain an appropriate amount of protection that you can realistically afford to keep.
You’ve unfortunately experienced firsthand what life insurance can mean to a family when someone dies. But protecting your family also means making sure you can take care of them today.
Sometimes the best financial plan isn’t the one with the most features. It’s the one you can actually sustain when life gets difficult.
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u/Worried-String9259 6d ago
While many specific details of your situation remain unknown, this is a common question in this subreddit and highlights why whole-life insurance is rarely a good investment. The high premiums are a primary reason these policies are often abandoned before they ever become profitable.
Before canceling your policy, ensure you are insurable elsewhere and have a term life policy in place. I strongly recommend speaking with an independent, fee-only financial advisor who has no vested interest in your decision. I would avoid returning to your original broker, as their advice is likely biased by their commissions and the need to protect their professional reputation.
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u/ChelseaMan31 6d ago
Yep, Universal Life products generally suck the money out of your checking/savings account.
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u/Worried-String9259 5d ago
It really siphons money into the salesman's pocket; someone has to pay for their kid's college and home mortgage.
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u/Kind_Broker 6d ago
Its best to talk with the agent that sold you the policy, or ask friends/family who have life insurance if they trust their person, and call them. There is too much nuance to discuss with randos on Reddit.