Why so little? Are they gouging us…leaving us out in the cold…getting one over on us? The simple fact of the matter is that owners of these policies just stop paying the premiums for the policies, effectively allowing them to die on the vine.
That leads us to why…as in why stop paying on a contract that offers protection to your family and loved ones, especially in light of the fact that you felt at the time of starting the policy it made sense, and was the “right” thing to do? That goes counter-intuitive to the possibility that the farther along into your term (10 to 30 years are available), the farther along you are on your life’s journey, possibly needing it now more than ever.
Let’s assume you have purchased a 20 year term life policy. You submit an application, have a medical exam, results are reviewed by an underwriter of the insurance company, and your payment (premium) required is a calculated based on your health, family history, age, sex, the length of the term (20 years here) and the benefit you want your beneficiary(s) to receive at the time of your passing. Let’s say you purchase this at age 30.
You are now protected for 2 decades in the event of your untimely passing. During this time you may get married, have kids, earn bonuses/ raises at work, buy a home, take out loans, pay college tuition, make investments, on and on. Life happens, as does the alternative. The need for the policy seems to increase deeper into the term. Especially when viewed that you are paying a rate based upon the age of 30, much lower than if you let it lapse and try to re-insure at age 43 or later.
Perhaps making sure you are being shown the right policy, with the appropriate benefit, and at a cost that you are comfortable with is the answer here. Otherwise, it might be all to easy to justify the halting of payments in what amounts to virtually pennies on the dollar for coverage. It puts the focus on the agent to offer the best solution for your situation. As a licensed agent, I would do nothing less.