Life Insurance

But those costs may be offset by new mortality rates. According to U.S. News & World Report, over the last several years life insurance companies have begun using new mortality rates with longer life expectancies. With longer life expectancies comes reduced risk, and in turn, the possibility of reduced life insurance rates. This may also lead to the possibility that you’ll be able to buy a larger amount of paid-up life insurance.

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What if you don’t need life insurance any more?

There are many options for terminating a whole life policy, including surrender, accelerated death benefits and life settlement, according to Doug Head, executive director with the Life Insurance Settlement Association, Orlando, Fla.

If you decide to terminate your contract for the cash surrender value, keep in mind that the decision is permanent and that there are risks associated with this course of action. For example, you may not be able to purchase another life insurance policy at a later date if you become uninsurable.

But before you surrender your whole life policy, particularly if you believe you can no longer afford the premium payments, Blaser suggests you check with your life insurance company regarding the availability of automatic premium loans. Such an option allows premiums to be paid from the policy’s cash value, he says. Should you decide to surrender the contract, keep in mind that any loans you’ve taken against cash value are taxed as ordinary income, he adds.

Take advantage of available life insurance riders

An accelerated death benefit rider or long-term care rider may also be options, Blaser offers. Riders are attachments to life insurance policies that alter the coverage or terms of your policy.

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