Not sure if I see the value in keeping my current U/L policy which I'd converted to using a partial amount of my existing term policy for a very specific, forward-thinking reason (not cash accumulation). I am increasingly concerned about the policy's effectiveness when current fees already seem to be eating up nearly all of the interest earned with each premium payment. The only thing keeping me from surrendering the policy tomorrow is a somewhat unusual personal situation which is difficult to describe here. I like the idea of having the coverage past my current term insurance, but the U/L policy is already expected to lapse before I reach age 90 (if I reach it) based on my current monthly premium amount. Would I be better served solely with term and a plan to invest any monthly savings if we surrender the U/L, or hold the course on the U/L for now and hope interest rates increase eventually?
You might also consider a lapse protected UL policy which provides guaranteed coverage until a specific chosen year or age. A no lapse UL can provide you with predictable premium payments (usually fixed/level) while providing coverage for life or what ever age you choose. The lapse free UL will only provide coverage and is not intended for cash value accumulation , so it may not be what yo are looking for. Talk to a planner or your local insurance agent to discover what will work best
Mike, it would be impossible for anyone to tell you exactly what can/should be done from your current position. Much more information needs to be know before moving forward. For instance, how much coverage do you really need? (This is determined by someone seeing your entire picture). There are many options as well. You don't necessarily need to terminate the existing policy, you could do a 1035 tax free exchange into another policy. You could use term, are you insurable now, etc, etc. Again, your best bet is to sit down with a planner or at least have a phone conversation with a planner and go from there. Usually there is a definite, clear direction you should go, but it is only uncovered after the planner knows all of the facts.