Infant kids/ life insurance proceeds

Tough to say. Could be a total fabrication. He likely makes more commission on a new policy than he does upgrading an old one. Usually, you're only paid for the increase amount ($200k in this case). But it could be that your old insurer has drastically tightened its underwriting criteria and he's suggesting a whole new company for good reasons. This happens more than you would think. Or it is even likely that your old policy was priced using outdated mortality tables. We're living longer, so the cost of insurance per thousand is dropping.

I don't think this is unreasonable. You know you can convert or delete PORTIONS of your coverage. Because there are fixed charges, it is more cost effective to get one big policy today and "chop off" coverage as it becomes un-needed in the future. This also gives you the option to NOT reduce the coverage if it turns out that reality doesn't align with your planning.

A trust would be best as it will describe exactly what the trustee can and can't do. It can also require bonding trustees and even ethically separated co-trustees to minimize abuses. An incentive trust can also be a method of "setting rules" for your kids after your passing. Of course, trusts don't draft themselves and it isn't free. The common and easiest method is to simply leave the money to the kids who will in turn be left with an appointed guardian. The guaradian will control the money for the benefit of the children. The guardian has a lot of leeway and abuse/embezzlement would be easy, but hopefully you have a guardian that you trust.

A simple trust like the one you may need shouldn't be more than $500. I can't say whether a lawyer HAS to draft a trust in Ohio, but regardless, one SHOULD.

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

Could actually be true, but not neccessarily the best thing for you to do. There are discounts that are available at the 500k level that could make it economicaly better than to INCREASE the existing contract a mere 200K.

IF (and I emphasize the IF) the 300K is of a PERMANENT nature' then the NEED for additional Insurance appears to be of a TEMPERARY nature. Meaning that it could be less expensive to cover those NEEDS with a form of TERM Insurance. I would suggest that you look at 200K for the 18year period, and if you feel that the NEED will be reduced in five years, REDUCE that contract at that time.

Obviously since I am not an ATTORNEY, I can not offer any LEGAL advice, but I would assume that you might want to leave the ENTIRE amount to a TRUST, with instructions. (REPEAT, THIS IS NOT LEGAL ADVICE)

Cal Lester CLU

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

Cal- the 300k is a term policy and the 500k is a term policy. At some points of your response it appeared you worded things like this might be a permanent policy.

We have a permanent policy for 25k which we are going to cash out (around 1500 in cash value) because the term is all we need.

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

Of course, that would be your decision to make. You do NOT mention the type of the ORIGINAL 300k Term policy. When does IT run out????? Quite possibly a year or two BEFORE you die.

You mention the fact that you have a 25k Permanent Policy, and that you intend to surrender it for it's cash value. That action would leave you with NO PERMANENT LIFE at all.

I gather that you have assumed that your investment portfolio will be more than sufficient to carry you through death (which might not be for MANY YEARS.) I do believe that there are a few people who had their life savings invested in the various banks that have been in trouble lately. I wonder how much money will be available to their heirs at their deaths???????????????

ps: do not walk too close to multi story buildings, it could be hazardous to your health ! ! ! !

Cal Lester CLU

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

The logic behind getting the 25k permanent policy was to cover funeral expenses (which is a fixed lifetime event/cost).

We now have enough in cash as an emergency fund to cover those expenses. That money will be invested in other taxable accounts. We were in year 5 or 6 or 7 of the original 20 yr term for 300k. I am age 35, wife is age 34. The policy was taken around the time we got married to cover bills (house, cars) in event other passes.

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

In general, if you don't anticipate having perpetual dependents and/or perpetual liabilities, you can probably do without permanent insurance.

Yes, some consider funeral expenses a perpetual liability, but it sounds like you have enough cash to "self-insure". So barring estate taxes or an expense that is likely to exceed your lifespan (like a 30 year refi at age 60), you can probably do without the permanent coverage.

Just my $0.02

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

As I mentioned in my last post, the decision IS yours, but I must make note of your response above, in which the contract will "run out" in about 13 years, when you are about 47 or 48 years of age.

That would leave a potential multitude of years to continue living with no life insurance in force. You must realize that the proceeds of a life insurance policy (that is a guaranteed benefit) is almost ALWAYS less than the surrender of 100 % dollars when they are needed.

Simply a comment to be considered... Cal Lester CLU

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.