How can we afford these life insurance premiums?


Q. My mother has a whole life insurance policy but she can’t afford the premiums anymore. Am I allowed to help with the bills? Or is there another way for her to keep the insurance, maybe lowering the amount of the death benefit or something like that?
— Trying to help

A. You have several options.

We’re going to cover some here, but your best bet is to contact the life insurance company to go over the specific policy’s options.

Generally, you can pay the premiums on behalf of your mother provided the premiums are below an amount that would trigger a gift tax, said Ed Gaelick, a Chartered Life Underwriter and Chartered Financial Consultant with PSI Consultants in Glen Rock.

As for your question about if there’s another way to cover the premiums, there may be, depending on the specifics of the policy.

You said your mom had a whole life policy, but exactly what kind of policy is it?

“It could be a pure whole life policy or something else loosely called ‘whole life,’ such as universal life or variable life, both of which are far from whole life,” Gaelick said.

He recommends you first understand exactly your mother has. You can do this by requesting from your broker/agent or directly from the insurance company’s Life Policy Services Department, which can provide a current policy status report showing current values and whether there are dividends that can be used to offset premiums, he said.

“While dividends are not guaranteed, they may very well hold true,” he said. “If no dividends, you really should speak with a professional to ensure you’re not going to be setting up policy loans or diminishing the life of the policy by letting existing values pay premiums.”

When it comes to lowering the death benefit, that could be possible as “a last resort,” Gaelick said, but again, you need to speak to the life insurance company.

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This story was originally published on Dec. 13, 2021. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.