Life insurance

[LivingAlmostLarge]

6 years ago when we had our first kids we bought term life insurance online with ING. We bought 25 year policy for $2m on DH and $500k on me. We then bought another 20 year policy 4 years ago with 2nd kid another $2M no extra for me. It cost us something like $1200/year for DH and $200 for me. We never buy from DH's work but we do take what they give us.

So we get a letter today from ING/Vaya that they are changing their terms on converting term to full life this month. They are calling and encouraging us to convert.

Is there any reason for us to convert our policies? We are close to FIRE if it matters. I planned it so that we'd be closing in on college being done and I figured when we bought the term policies we really wouldn't need it after 25 years. I bought 25 because we weren't sure if we'd have 2 or 3 kids and in case it became too expensive to cover DH we'd be set with the minimum I'd need. Right now we have a lot but again we weren't sure about how many kids. For peace of mind since I haven't worked in 6 years I prefer paying $1k to know I can never work again and still afford everything.

[Captain Save]

what is DH?
What are the changes in conditions for convertability?

[kork13]

^^ DH = "Dear Husband". Others you'll commonly see are DW (wife), DS (son), and DD (daughter). Others are used, but those are the normal ones.

LAL: No. No, no, NO, NOOOOOOO!!!!! They wouldn't be pressuring you to do it if it wasn't going to be in their financial self interest. Stick with your term policies. They'll remain the cheapest option you have, and they fully meet your insurance needs. There's no reason to help the ING salesmen line their pockets. If anything, once you hit FIRE, or really whenever you feel comfortable your situation, I would just cancel the policies. Regardless of how long is left on the term.

[feh]

Is there any reason for us to convert our policies?

Absolutely not.

[LivingAlmostLarge]

Apparently the change is now they do a preexisting condition and health exam so our only chance to convert. I'm worried they'll stop our term policies.

[kork13]

Apparently the change is now they do a preexisting condition and health exam so our only chance to convert. I'm worried they'll stop our term policies.

You can confirm with your individual state's laws, but in most cases, once established, an individual term policy can only be cancelled by the insured person, or by the insurer in the event of premium non-payment. For example, here it is from New York (was just easiest for me to quickly find):

8. Can an insurer cancel term life insurance?
A term life policy will stay in force as long as you continue to pay the premiums due. If you miss a premium due date you will have a 31 day grace period to pay the premium due. Your policy will remain in force during the grace period.

An individual term life policy can be canceled by the insurer only for non-payment of premium. If you do not pay the overdue premium payment within the grace period your term policy will terminate. The policy cannot be canceled due to a change in your health status.
http://www.dfs.ny.gov/consumer/que_t...e_life_ter.htm

[feh]

You can confirm with your individual state's laws, but in most cases, once established, an individual term policy can only be cancelled by the insured person,

This would be my understanding also. You have a contract; the insurer can't just break it.

[Captain Save]

^^ DH = "Dear Husband". Others you'll commonly see are DW (wife), DS (son), and DD (daughter). Others are used, but those are the normal ones.

LAL: No. No, no, NO, NOOOOOOO!!!!! They wouldn't be pressuring you to do it if it wasn't going to be in their financial self interest. Stick with your term policies. They'll remain the cheapest option you have, and they fully meet your insurance needs. There's no reason to help the ING salesmen line their pockets. If anything, once you hit FIRE, or really whenever you feel comfortable your situation, I would just cancel the policies. Regardless of how long is left on the term.

if the term is so cheap ... why cancel it? especially if it's convertible.. . let's say he ends up with a critical illness .. if it's convertible, he can just convert the term to a permanent policy ... now he will pay permanent rate but it will but the return on investment will be well worth it because he will cash in the a great portion of the DB money to pay for his medical expenses...

Now he doesn't have to do it now but he should know the parameters.. there is usually an age or year limit of when you can convert your policy

[Captain Save]

Apparently the change is now they do a preexisting condition and health exam so our only chance to convert. I'm worried they'll stop our term policies.

It won't stop your term policies.. you just won't be able to convert without a health exam.. which IMO defeats the purpose of a convertible policy to begin with

I don't know what you mean by "they do a preexisting condition"