Your need for life insurance may decrease over time, allowing you to reduce or eliminate insurance premiums and benefit from accrued cash values.

1. Stop making premium payments on any term coverage that is no longer necessary for your designated beneficiary.
2. Reduce the death benefit of a policy if some coverage is still needed.
3. Call the customer service department of the insurance company’s home office and ask for the necessary forms to effect either change.

Maintaining Coverage With No Further Premium Payments:

1. Find the insurance policies (and latest annual statements) on which you are still paying premiums and for which you are the owner.
2. Separate term policies from permanent policies (ones with cash values), and set the term policies aside.
3. Write down, on a separate piece of paper for each permanent policy, the name of the insurance company that issued the policy, the phone number of the company’s home office, and the policy or contract number.
4. all the customer service department of each insurance company and ask the representative to send you an “in-force policy illustration” showing the effect of no further premium payments.
5. Document your call, noting the date, time of day, full name of the person to whom you spoke, and his or her direct phone number or extension.
6. Call the customer service department again to discuss your options after you get the illustration in the mail.
7. Stop making premium payments if you determine that you no longer need the coverage or if you can keep some or all of the coverage in force with the cash values of the policy.

Exercising the “Reduced Paid-Up Insurance Policy” Option or the “Paid-Up Term” Option if Available:

1. Contact the customer service department at the home office and ask the representative to calculate a reduced paid-up insurance policy based on current policy values.
2. Factor the lower death benefit of such a policy into your retirement and estate planning.
3. Fill out the necessary forms to allow the company to issue you a new permanent policy.
4. Exercise the paid-up term Option if available. Determine if your policy provides a paid-up term option, and calculate how long the term coverage will actually last.
5. Choose this option if your insurance needs do not exceed the period of extended term coverage.

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

This entry was posted on Sunday, May 3rd, 2009 at 7:08 am and is filed under Finance tips, Healthy, Insurance tips, Money tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.