Craig Miller":3coupoj9 said:
I can't remember all the details from my life insurance days but the company is required to keep a percentage of the policies bought in reserve so they don't go under like that. They know that most people will quit paying on the policy before they die.
I took out what I thought was a large policy when I was 16. It had an annual payment of $180/year. Its built up some sort of "cash value" that is worth several thousand dollars IF I cancel it. There were times when I was tempted but I didn't and have kept paying the annual fee. With the amount of "cash value" that is now in the policy the insurance company told me there is no way I'll live long enough to ever deplete this amount so they offered to take my annual payment out of this "cash value" each year rather than my having to write a check. I don't want to do this because their annual bill each year gives me assurance they are still in business and haven't been bought out by someone. I suspect that they were banking on if I had them take the money out automatically was to erase the paper trail that lets my family know there is an insurance policy they can get at my death.
If you have children, I believe this type policy would be a perfect thing to set up for them at a young age when it would be cheap. A policy of the same value for me now would be extremely expensive.