Author Topic: Help! I may have made a mistake!  (Read 1491 times)

VanteBoll

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Help! I may have made a mistake!
« on: July 20, 2018, 10:25:19 AM »
Hope all is well and fruitful with you all,

I have a situation where I am starting to feel like I made a mistake by not doing my due diligence.

Background information I am active duty military, I fund my TSP, Roth IRA, 01 Vanguard Index fund, and dabble in some stocks.

I recently started a Custom Whole Life policy with NewYork Life. My understanding was that this would be a investment account just like any other of my investments, making a certain return depending on the market/return. I'm starting to feel like I purchased an actually life insurance policy which I DO NOT need seeing as to how I am active duty military and that is covered already. My question is, did I mess up? I'm doing research on what exactly Custom Whole Life insurance is, but does anyone else have it and why?

Thank you for your time.

rubybeth

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Re: Help! I may have made a mistake!
« Reply #1 on: July 20, 2018, 10:39:21 AM »
Yeah, you don't need a whole life policy (also known as "universal life insurance") if you have life insurance elsewhere. Maybe you'd want term life insurance, but definitely not whole/universal. Can you cancel the policy? If you've only paid for it for a short time, no big deal. Chalk it up to a learning experience.

Many people have life insurance via their employer, but keep in mind that these policies usually only pay out a fairly small amount. The amount of TERM life insurance you want to carry in addition to an employer policy varies and would be based on what your financial responsibilities are (dependents). For example, husband and I don't have children, but we still carry additional life insurance so that if one of us dies, the other would have options (invest the full amount to make up for the working years of the spouse, retire early, change careers, etc.).

Nords

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Re: Help! I may have made a mistake!
« Reply #2 on: July 21, 2018, 10:44:11 AM »
I have a situation where I am starting to feel like I made a mistake by not doing my due diligence.

Background information I am active duty military, I fund my TSP, Roth IRA, 01 Vanguard Index fund, and dabble in some stocks.

I recently started a Custom Whole Life policy with NewYork Life. My understanding was that this would be a investment account just like any other of my investments, making a certain return depending on the market/return. I'm starting to feel like I purchased an actually life insurance policy which I DO NOT need seeing as to how I am active duty military and that is covered already. My question is, did I mess up? I'm doing research on what exactly Custom Whole Life insurance is, but does anyone else have it and why?
The short answer is that you made a very common mistake, especially for servicemembers.  You've earned a new diploma at the School Of Financial Experience.

You have a few choices:
- Try to cancel now and get a (very) little of your money back, or
- Keep paying the premiums (through the nose) until the surrender period ends and you can get some of your money back, or
- Just stop paying and let the policy lapse.  Discuss this option with the JAG before you execute so that you can deal with the insurance company's angry threats to report your behavior to your command or to ruin your credit rating.

In the meantime, I'd maximize your SGLI coverage.  You don't actually personally need maximum SGLI coverage right this minute, but if you're injured or ill on active duty and end up with a disability discharge then you may be considered uninsurable.  If that's the case then at least the SGLI policy can be converted to the guaranteed insurability of VGLI for a few years while you decide what options you want.