UNUSED INSURANCE POLICIES 

Life insurance is an unique product. It is of enormous value, but most people don't buy it except at the urging of a life insurance agent.

One evening I went with an insurance agent to meet a young couple with a new baby (have you ever heard of an old baby?). The couple needed an estate plan and life insurance. The agent recommended a large term policy with an accidental death rider.

The couple wanted the insurance, but would not have the money to pay the monthly premium until the husband's payday, two weeks away. The agent was forbidden to pay the premium, so I loaned the couple the money, something like $50.

Ten days later the husband was driving to Cambridge in heavy rain. His automobile skidded and he died when his car struck a bridge abutment.

The insurance policy had not yet been issued, but the company paid the full death benefit, including the double indemnity for accidental death, because the company had received the first monthly premium, and in due course of underwriting the company would have issued the policy.

The insurance was enough to permit the young widow to live in comfort and care for her child. From time to time she sends me a note - often with just one word "Thanks " and a picture of her and her son.

Young persons buy life insurance to protect their families. People with substantial wealth often buy life insurance to fund plans to reduce estate taxes, and find themselves holding costly insurance policies if the plans are abandoned.

If a life insurance policy is no longer needed, don't let it lapse without looking at it carefully. There are companies that will purchase life insurance policies.

They are assuming that the insured will die before what the company paid for the policy plus premiums paid later and interest on the purchase price exceeds the face amount of the policy. Even term insurance, which has no cash value in the policy, may have considerable resale value.

If you are considering discontinuing an insurance policy, talk to us first. We will be glad to look at it with you and help you decide the best way to deal with it.