Insurance

Q. We are a family of four, with 2 daughters, ages 7 and 18. I read your column in Sunday's paper regarding term or cash value life insurance. Reading your column motivated me to analyze my family's life insurance situation, and I was wondering if you could answer a few questions.

My husband bought a Flexible Premium Multifunded Life Insurance policy with a specified face amount of $125,000 on September 2000. We have been paying monthly premiums of 115.00 every month. (That's about $10,000 since inception!!!!!!)

I am thinking this is not a good idea. I want to stop paying for it because I think we have paid enough. However, I do not understand the statements they send (I honestly believe they make it confusing on purpose) and I am afraid that if I stop paying, we will lose the $10,000 we have paid so far.

Do you have any recommendations for me? I am very confused. What questions should I be asking the insurance people? I am afraid that when I speak to them, I get very little information.

Millie Bu, Weston

A. Insurance can be one of the most confusing purchases anyone can make, and the insurance companies and agents don't seem to make it much easier, although many try. Where's the agent who sold this to you? The insurance company (which I have deleted for obvious reasons) markets their insurance through insurance brokers who are paid a commission to sell you this policy. They're also paid an ongoing fee to service your policy, which means answering all your questions. It's called customer service, something all agents need to do well to succeed. So start with your agent. His or her name should be on your policy, in case you don't remember.

Now, at the risk of irritating a lot of insurance agents out there, please don't look at your life insurance policy as an investment vehicle. It's to pay your heirs when one dies, not to retire you. Part of the $1,360 you have been paying into your policy each year is paying to be insured, plus a little extra goes into a savings account to help pay for the insurance down the road. Ask your agent (or the company if you can't find him) what the cash value is, and what interest does it pay you. Will the premiums stay the same and cover the insurance forever? If not, for how long? What if you stop? The premium is flexible. What does that allow you to do without hurting the policy? Does your husband even have enough insurance? Would a term policy for 20 years be a better solution? What would that cost? And Millie? Get a term policy for yourself as a gift to your family. It'd cost a ton to find a Mary Poppins if you weren't here, and term policies are cheap.

Most of all, please try to find someone whom you can have confidence in, in case your agent doesn't do it for you. There are a lot of good people out there happy to have your business.